Tesla Increases Price Of New Mid-Range Model 3

OCT 24 2018 BY STEVEN LOVEDAY 68

It seems Tesla Model 3 prices may continue to fluctuate.

It comes as no surprise that Tesla is adjusting the price of its new mid-range Model 3 (LEMR). When the first announcement were made for the dual-motor all-wheel-drive Model 3 and the performance version, price adjustments were made a few times. Now, we see the new variant’s price increase by $1,000. However, at the same time, the all-wheel-drive price was reduced by $1,000.

Just last week, Tesla CEO Elon Musk took to Twitter to announce a new, less expensive Model 3. He stated its price with California incentives applied. The original tweet, which has since been deleted, read:

Costs $35k after federal & state tax rebates in California, but true cost of ownership is closer to $31k after gas savings

— Elon Musk (@elonmusk) October 18, 2018

Visiting Tesla’s website showed a similar pricing scheme, although you can see that the actual price for the car was $45,000:

Now, as you can see from the Model 3 Owners Club tweet and image above, the price with incentives went from $33,200 to $34,200 and the actual price is now $46,000. The club believes that Tesla may continue to adjust pricing based on demand. In addition, we reported that the Model 3 Long Range is going away. So, if you know which Model 3 variant you’d like to order, do it sooner rather than later or you might be impacted by these changes. Also, the number of buyers that may still be able to take advantage of the full federal EV tax credit is diminishing.

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68 Comments on "Tesla Increases Price Of New Mid-Range Model 3"

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Ron M

Well surprise surprise that Tesla raised prices tariffs on aluminum and steel raise prices. I read US steelworkers were planning on striking if they didn’t get higher wages.
Although I don’t like seeing these higher prices I’d rather see Tesla raise prices and be profitable and succeed.
I’m also happy that Tesla is planning on building the TM3 and TMY at new factory there building in Shanghai.

TJKR

Shanghai factory can’t come soon enough!

Pushmi-Pullyu

Who in the world would give that hopeful statement a down-vote?!?!

Solo Pilot

Not sure you understand. Why would you want the China trade deficit to increase and also give China EV technology. Did you know that China requires knowledge sharing for all foreign manufacturing?

Terawatt

But they didn’t. They adjusted the midrange up, but the AWD down, both prices moving by $1000.

Seems pretty clear that more people were ordering the midrange and fewer the AWD than Tesla had anticipated. Making the net difference $2k less makes it more tempting to stretch to the faster, more powerful, longer range dual motor version.

Dav8or

How are these “price adjustments” any different than the “stealerships” everybody hates so much, charging over MSRP for hot new products?? Please explain to me how one is ripping you off and the other isn’t?

Mark.ca

Gladly!
The dealers have a bottom line that you are not getting fron the get go. You need to work your ass off in order to even get close to it. MSRP means nothing, it’s just a starting point in your negotiation. If they quit playing games and post their real prices from the beginning maybe they would sell more and people will hate them less.
Case in point, i went to many dealers lately to replace my last gasser. After 2 weeks of negotiations with one of them they finally give me a price that I thought was fair. Going there i found out they included discounts that I didn’t qualify for. To make this work they gave me another discount that i did qualify for and lowered the sale price. But at signing, surprise surprise! That discount nullified the 0% apr offer and added $5k to the back end of total cost. Many will not do the total cost math and fall for these dirty tricks. There you have it, a real life example why dealers are scum! The fact that you have people agreeing with you it proves just how clueless some are.

(⌐■_■) Trollnonymous

+100

theflew

There isn’t really a difference. At a dealership there is a bottom line that you’ll never know. I doubt the dealership even knows the bottom line cost for GM to produce the car. All the dealership knows if the lowest cost they can sell the car to make a profit. Even if the dealership sells the car for no profit. GM is still making a profit on the car. That’s how GM keeps the lights on, pays for R&D, advertising, etc…

Tesla has the same cost you just pay the MSRP price. Tesla supports the sales centers throught the sale of their cars. GM funds dealerships via the profit margin on the cars they sale.

Dante

You and the person who came by right before you both get the same price no matter who you are or how many hours your spend haggling. There is fairness in that. You can order your car in a minute or two versus having to do a detailed forensic investigation and dealing with people who are literally trying to swindle you.

Mark.ca

Lol….seriously?!
The dealers know exactly what the invoice price is, they buy the fricking cars not store it for the manufacturer. They make most of their profits through service but still make a killing here and there when they catch a sucker off guard. The Nissan Leaf right now if a prime example of how dealers and manufacturers steal from people. Here is a quote I recently got. If you are interested please let me know, i will send you to “my guy”….lol.
17500 36mo/12k miles total lease on 37250 msrp!!! The value of the car at the end of the lease (rv) was 14550. So let’s do the math… 17500 + fed credit which they get 7500 = 25k + 145500= 39550!!!!
So i will spell it out for you man, since it’s obvious you catch on slow, they are selling a 37250 msrp car for 39550 + interest if you finance!!!
One last question, do you work for a dealer?

Pushmi-Pullyu

“There isn’t really a difference… I doubt the dealership even knows the bottom line cost for GM to produce the car.”

You really ought to try learning something about a subject before you start arguing with those who actually do.

Try Googling “dealer holdback”. Who knows? You might learn something.

William

Try this Stealership on for size, if you think you were negotiating at the lowest pond “scum” “surprise surprise” level, and switch-eroni haggle fest!

11 months ago, Norm Reeves (12 businesses) had their hand in your type of “dirty tricks”, all over Cali!

Their FTC penalties totaling $1.4 million!

The Sage Autogroup, here in So. Cal., got a similar $3.6 million FTC penalty, for their “tactics” the year before!

Thats ONLY $5 million in fines and Stealership wrist slapping, between the two, worst of the worst swindlers!

https://www.ftc.gov/news-events/press-releases/2017/11/southern-california-auto-dealership-group-pay-14-million

https://www.ftc.gov/news-events/press-releases/2017/03/los-angeles-based-sage-auto-group-will-pay-36-million-settle-ftc

Mark.ca

Way too little in fines!

Pushmi-Pullyu

The difference is that Tesla’s price adjustments aren’t an attempt to rip people off or take advantage of the fact that legacy car salesmen are professional negotiators, and customers generally are amateurs.

Or to put it another way: Tesla’s pricing doesn’t treat customers like con men treat their “marks” (their victims), as many or most legacy auto salesmen do.

But thanks for asking…. Mr. Serial Tesla Basher. 🙄

Murrysville EV

With all the near-daily product shuffling, Tesla is showing signs of desperation to become profitable by trimming around the edges.

10/19 – Mid-range Model 3 introduced, LR TM3 killed
10/23 – Model S and X interior options reduced
10/24 – Mid-range Model 3 price increased

Billy Gomes

From another perspective, Tesla’s product offering is maturing, they are finding what demand levers to push and pull to get people to buy more cars.

10/22 – Tesla reschedules q3 earnings call
10/23 – Musk announces their will not be a traditional “refresh” of models, a famous TSLA shortseller has converted to be a TSLA long share holder, stock jumps 13% the same day.
10/24 – AWD price decreased by $1000

Tesla has been in the #1 spot for most BEV units sold in the US since March 2015. not sure what should be considered desperate when you’ve been the market leader in this space for almost 4 years, its possible Model 3 may be the best selling passenger car in the US as soon as December, if not the best selling car in 2019 in the US.

Dav8or

Market leader doesn’t automatically mean profitable. At the end of the day, it’s about the money.

Nix

You post sounds super silly now, 9 hours later.

antrik

“At the end of the day”… How fitting 😛

Dante

“Tesla is showing signs of desperation to become profitable by trimming around the edges.”

You could say the exact same thing to every one of the 100s of minor options and trim change Tesla made in the last 6 years couldn’t you? I don’t really agree with the logic. It’s almost like you’re saying that when Tesla becomes stagnant and inefficient, that’s the only way you know they aren’t desperate.

If Tesla stays on its toes like this it’ll never have to worry about their future. Their flexibility and good management are assets, not liabilities. They’re always going to be able to do more faster and cheaper than the competition.

Pushmi-Pullyu

“LR TM3 killed”

Factually incorrect.

It’s pretty bad when we can’t even tell what part of your cabbage is intentional FÜD, and what part is simple ignorance on your part.

Either way, you’re looking pretty desperate. Hope you enjoy losing money, because you certainly will on your “short” investment later today!

Pjwood1

As TSLA holder, witness how a higher margin lower unit strategy may be playing out. Going 53k, to 66k Q4, is not a ton of Q over Q ramp.

Maybe capex limited, for 10k/wk factory investment? (I already have earnings call hat on)

Pushmi-Pullyu

The limit is factory space inside the one-and-only assembly plant that Tesla has. They’ve already gotten so desperate for more room that they’ve started putting partial assembly lines in tents outside the factory, for frack’s sake!

Glad to see that Tesla is expediting building of the Shanghai Gigafactory, which will produce Model 3’s and Model Y’s. Tesla certainly needs a new assembly plant ASAP!

Rosonator

I can imagine several several reasons, but none of them are valid, Tesla should be taking its customers more seriously.

A car is not a toy from Amazon nor a flight ticket where the price tilts everyday, lots of clients plan their purchase months or years ahead and such thinngs do not help.

Ron M

When the GOP policies effect the market place and raise the input costs. What else is a company suppose to do take a loss or raise there prices to reflect higher input cost.
Ford lost a billion the last quarter because of the higher cost of aluminum and steel even though they source 90% of aluminum and steel for vehicles built in the US from US and aluminum, steel companies.

Stimpacker

Sounds like you’re creating an excuse. Tesla didn’t state why MR price went up.

If it is truly cost of raw materials, then why did the LR price go down?

Tesla has always raised prices for popular options.
Paint went up.
AWD $4K then $5K then $6K then $5K then $4K.
Model S rear child seats went up 3 times.

OK to adjust pricing for optimal profit but please don’t say they’re like Apple, where the price is fixed despite long lines.

No dealer haggling but this reeks of dealer markup. I’m a Tesla shareholder but I’m also a customer, hate getting yanked around. Free Supercharger, then no then credit then limited time. Grrrr.

Ron M

Apple doesn’t even make a product they design a product and have a manufacturers build the product.

Brian

Ridiculous. Every fossil dealer changes prices monthly. Buy a car at the end of the month you pay less. Buy a car at the end of the model year you pay less. But a car online you pay less. Try to buy the car that ran in the paper on Friday as advertised price but it was “sold”on Thursday. The list goes on.

theflew

The MSRP of the car doesn’t change. The incentives they have on the car changes. You could always just pay MSRP. I’m sure NO dealership would ever complain about that and you would be out quickly as well.

Mark.ca

Of course it does! They are called dealer addons and can be useless stuff like splash guards or things you would think they are included like floor mats. Many, many things can push the msrp higher.

Pushmi-Pullyu

Sure, you could always pay the MSRP that includes baked-in add-ons which inflate the price, such as “dealer holdback”. If you agree to pay full MSRP, the car salesmen will smile, and call you a sucker as soon as you’ve left.

The MSRP isn’t what the auto maker actually thinks the average buyer will pay; it’s merely a starting point for negotiations.

William

Tesla has studied and knows the legacy ICE OEM Snake Oil sales tactics well.

By modifying and adjusting (“yanked around”) pricing, on the most popular Tesla options, it is the way to reach profitability a bit more quickly. Not a bad tactic in a competitive marketplace, when expanding your business, requires lower financing costs.

theflew

Other automakers only change prices yearly – not within a week of annoucing a price. Tesla would have been better off overpricing it and decreasing the price.

Dante

Automakers change their pricing all the time even if they don’t change MSRP. The trick is in all backroom nonsense that happens between MSRP and when you drive away. You can get swindled into a financially engineered weekend “deal” that costs you more for a dying model year. Tesla is being upfront and you aren’t being swindled. The lack of model years is a plus too. That as how the cars retain value.

Pushmi-Pullyu

“Other automakers only change prices yearly.”

That’s rather irrelevant, since customers don’t buy from legacy auto makers. They buy from dealers, who very definitely change prices quite a bit over the course of every model year.

https://www.usatoday.com/story/money/cars/2013/10/23/best-time-to-buy-a-new-car/3170251/

Pushmi-Pullyu

“If it is truly cost of raw materials, then why did the LR price go down?”

Good grief. The average selling price of a car from a legacy auto maker goes down significantly over time, from introductory offers to end-of-model-year closeouts. Tesla’s prices are far more stable, since they don’t vary by season.

Criticizing Tesla for adjusting prices due to real-world supply-and-demand issues is ignoring the real world, and ignoring real business needs to make a profit, rather firmly.

protomech

“When the GOP policies effect the market place and raise the input costs.”

None of that has changed in ways that could not have been foreseen within the last week.

This is Tesla charging what the market will bear, plain and simple.

John Doe

It does not matter if Ford source from US manufacturers, as they have increased their prices by almost as much as the tariffs to make (more) money.
If you look at what steel and aluminium actually is sold for internationally, you’ll see prices are down. They (manufacturers) have slightly lowered their prices, since they sell a bit less to the US. Tesla could benefits from that if they get their production started in another location.
Just hope they don’t start to source from the most dirty manufacturers – no matter where they’re located.
The costs of us made vehicles, equipment, washers, dryers and other stuff made of metal will increase ever so slightly. For many products the price increase is so small the manufacturer will cover the extra cost. For cars . . They should let the customers pay.

the dane

And how about the used resale value? A price drop is also cash out of hands from the current owners. A stable consistent pricing is very important in the lower price segments. Showing bad judgement now may hurt Teslas ability to sell cars in the $20k+ segment in the years to come. Buy a $25k car today, loose $1k overnight is going to scare customers away.

Terawatt

The price decrease certainly helps those who planned to get the AWD.

I’m playing with the idea myself. Have a Kona on order, and at the moment the “used” ones are going for much more than list price. So much more that I might be able to sell the Kona and get the dual motor M3. It’ll still be more expensive and less reliable and not as well equipped as the Kona, but much faster, more fun, and sexy. Might even impress the girls. Not sure I can afford to ignore that 🙂

leafowner

Pricing is all about supply and demand. Most auto makers offer rebates, special financing, etc. if they are trying to move some dogs….. Tesla does not do discounting — they just adjust the price — no negotiations….

BoltEV (was SparkEV)

After fed tax credit and CA rebate and on sale and gas savings, BoltEV is only $18K when you apply Tesla pricing.

Model3 Owned- Niro EV TBD -Past-500e and Spark EV,

I do find that funny on how they do their ‘true cost of ownership’. If you put that against things like the leasehacks for the Bolt. The Bolt is dirt cheap — From my old Spark point-of-view. all these costs of infinitely expensive. (Drove Spark for essentially free just after rebates).

Cypress

Seen lease options for $149/mo for the Bolt EV. That’s a good deal.

Mark.ca

Many are paying the $14k difference obviously. I think it’s worth it.

Model3 Owned- Niro EV TBD -Past-500e and Spark EV,

Yours truly included . Spark and 500e were fun, but Model 3 has largely replaced our G37 in full. They really don’t need to make a Y but just a 3-Hatchback version and will sell plenty more

antrik

Waiting for a certain regular poster to come in and tell you that that’s exactly what the Model Y will be, since CUVs are just hatchbacks! 😉

Pushmi-Pullyu

Are you talking about me… and do you think I’m wrong? 😉

Not all CUVs are mere hatchbacks. But the EPA does draw a line between “cars” and “light trucks”, and some automobiles dubbed “SUV” by the auto maker (such as BMW’s smaller “SUVs”) are nonetheless classified by the EPA as “cars”, which means they aren’t actually SUVs nor even CUVs.

antrik

I’m pretty sure nobody ever used the term CUV for something using a truck frame…

(In fact one might argue that CUV is the correct term for everything that clearly has a higher ground clearance and body than a traditional car, but isn’t build on a truck frame, and thus doesn’t officially qualify as a SUV… Though media seem to be using these terms much more freely.)

BoltEV (was SparkEV)

Before Tesla offered free charging for 3, I would’ve totally agreed the premium is worth it. But seeing so many Tesla 3 on the road and many (many many many) free chargers coming soon, it is totally NOT worth it.

Mark.ca

Do you have nightmares about clogged charging stations?

God/Bacardi

Did they adjust the “gas savings” amount as well?

Benz

” … and dropped AWD price by $1000″

So, that means that Tesla wants to persuade some of their customers to choose the Mid (or Long) Range AWD Tesla Model 3?

Tesla wants their customers to choose the AWD option.

After a while (1 or 2 years) the AWD option will be mandatory.

Do Not Read Between The Lines

I disagree on the mandatory AWD.
I think Tesla needs the SR and will want the RWD model to attract buyers up from the mainstream market.
But in the future Tesla will have the Model Y, and on that they’ll make AWD mandatory.

theflew

Most CUV/SUV’s sold today aren’t AWD, so I don’t know why the trend would change with Tesla.

antrik

Unlikely. Unlike on Model S, AWD is not a clear win for Model 3. And considering the extra cost, they definitely wouldn’t do that at least until they introduce an even lower cost car for those that don’t want to pay the premium…

Pushmi-Pullyu

“After a while (1 or 2 years) the AWD option will be mandatory.”

Tesla just did make the AWD “option” mandatory for the LR version of the Model 3.

Presumably they won’t for the smaller battery pack versions, but you never know…

Allan

The e-commerce model seems to have arrived for cars now.

It’s like when I moved from Taxi to Uber, the prices dropped, sure, but fluctuate wildly within an hour. I know the average cost to my destination is, say, $7, but the price could by anywhere between $5 and $10. Factors such as traffic conditions, special events, supply and demand, etc, are now factored into the price in real time.

Pros and cons.

:))

bro1999

These pricing gymnastics must sure be annoying for potential Model 3 purchasers crunching the numbers prior to taking the plunge. They need to recalculate every few days.

Gator Rican

^^^This is me 🙁 Kind of over it. Almost put down the $2500 today, but not knowing if I’ll get the full tax credit is making it difficult. The daily price changes do not help at all.

Nix

That is very funny, considering that you openly BRAG about one of the “benefits” of buying a Bolt is having no idea what the price will actually be when you walk into the dealership, and that the price normally is thousands of dollars different than the price that GM advertises as the MSRP.

So you think the pricing gymnastics of multiple thousands of dollars after you walk in the dealership door is good when GM does it and isn’t transparent at all, but bad when Tesla dares to transparently and publicly change the price by $1K dollars???

Cypress

“Tesla is like a box of chocolates, you never know what you are going to get” -Forest Gump.

Nix

This is the start of price-drops for the LR AWD, as I predicted 4 days ago. As margins on the LR AWD hits targets in future quarters (likely 2019) this price will continue to drop.

https://insideevs.com/tesla-model-3-long-range-rear-drive-gone/#comment-1552839

Model 3 mid-range initial price reflected an initial introductory “sale” price, and now that sale is over. The price will also drop in the future as margins on the mid-range model also improves. Amazingly, despite car dealerships having sales all the time, somehow when Tesla does it, lots of folks (most with no intention of ever buying a Tesla) freak the fvck out.

Pushmi-Pullyu

Indeed, the amount of whining here over a mere $1000 shift, both up and down, is rather eye-rolling. Personally, I don’t know anyone who would complain if they went to buy something they had planned to buy and found the price had dropped $1000.

I guess the Tesla bashers feel they must find something to whine about, now that their #1 FÜD argument — “Tesla isn’t profitable and never will be!” — has been smashed to bits.

Pushmi-Pullyu

“Now, we see the new variant’s price increase by $1,000. However, at the same time, the all-wheel-drive price was reduced by $1,000.”

Presumably that’s supply-and-demand. Presumably demand for the new Mid Range Model 3 has been higher than expected, so Tesla increased the price. Perhaps more customers shifted their order from the Long Range AWD version to the new Mid Range version, so perhaps Tesla lowered the price for that.

But Tesla’s shifting costs may be a factor, too. Rapidly ramping up production capacity (and delivery capacity, and service capacity) certainly must make it hard for company accountants to pin down the exact cost of making and delivering any version of the car! I’m sure it would be easier to calculate if things were to settle down. But they never will settle down so long as Tesla is rapidly ramping up production!

Jonathan B
I can’t even keep track of the pricing changes for the model 3 so far. We’ve had 4 different AWD prices. We’ve had 3 different Performance Model prices. We’ve had paint price changes about 3 times. We’ve had the white interior price change. We’ve had EAP/FSD prices change, and go away entirely. We’ve had the price of delivery change, and now just a couple days after launching, the MR price changes. There is absolutely NO consistency here with Tesla. While I do agree that Tesla changing their pricing is really not much different than a conventional car dealer adjusting and discounting the MSRP (or adding mark ups for demand), it does put them in a quite different situation when it comes to optics. Every other car dealer can point the finger at the middleman while Tesla is left as the sole responsible party. They also tout a process of transparency with regard to car shopping, but clearly this is out the window, because you can’t trust their advertised price for a day, week, month, etc… The reality is that they are trying to juggle a few competing factors. (1) They have two different assembly lines making AWD and RWD cars.… Read more »