People Will Pay More For A Tesla Model 3 Due To The ‘Tesla Stretch’

NOV 18 2018 BY EVANNEX 196


The Tesla Model 3 is turning out to be an electric car that’s seducing car buyers across multiple market segments. According to CleanTechnica, “45% of current electric car drivers plan to buy a Tesla next.” Okay, that’s understandable. Non-Tesla EV drivers might be interested in a Tesla. That said, it’s extraordinary how many gas-powered car owners, from vastly different auto segments, are transitioning to Teslas.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Tesla’s Model 3 (Image: CleanTechnica)

Bloomberg reports, “When Chief Executive Officer Elon Musk first revealed the Model 3 at a late-night party in March 2016, the vehicle was expected to compete in the premium sedan market against the likes of Audi, BMW, Lexus and Mercedes. Instead, owners of mass market cars like the Honda Accord and Toyota Prius are opening their wallets for the sedan, signaling that the vehicle is pushing Tesla beyond its luxury niche and more into the mainstream.”

“For Earl Banning, getting behind the wheel of a Tesla meant spending more than he ever had on a car. The 43-year-old Air Force neuropsychologist from Dayton, Ohio, ponied up $54,000 for a Model 3, figuring he would save on gas and keep the car for a long time. It was almost double what he had previously paid for a fully loaded Honda Accord,” reports Bloomberg.

Above: The most common cars traded in for a Model 3 according to Tesla’s CEO Elon Musk (Chart: Bloomberg)

Banning says, “I call it the Tesla Stretch — everyone I’ve met who owns a Model 3 is willing to spend more to get into a Model 3.” For example, a former Nissan Altima owner, 36-year-old Eric Snapat, spent nearly $60,000 on his new Tesla. And 26-year-old Robert Preston actually charges $155 a day to rent out his Tesla on Turo to help pay for his new Model 3. “Every weekend I have someone renting it,” Preston said.

“Tesla recently said that more than half the trade-ins for the Model 3 were from vehicles priced below $35,000. And there are signs that the sedan’s popularity is adding [some] pressure on rival carmakers… In October, sales of cars such as the Accord and Prius continued to slip as deliveries of the Model 3 ramped up,” according to Bloomberg.

Above: A Tesla Model 3 charging in Washington, DC (Image: Wikipedia via Mariordo (Mario Roberto Durán Ortiz)

“Tesla has captured lightning in a bottle,” said Jeremy Acevedo, manager of industry analysis at researcher Edmunds. “It’s hard to even benchmark the Model 3 against other cars because it’s broken the mold in so many ways.”


Source: BloombergCleanTechnica

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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196 Comments on "People Will Pay More For A Tesla Model 3 Due To The ‘Tesla Stretch’"

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Makes sense, when you consider only 1 1/2 years ago Teslas were only for the wealthy few. Look at how much you get with Model 3- similar acceleration, better handling, ALL the features (audio, AP2, Supercharging) of the Model S. And certain advantages over the Model S- easier to park and better range than most models.

And yet Model S sales are holding strong! That’s really surprising, IMO. I figured at least 20% of those considering the S would be lost to the 3, but I guess new buyers replaced them.

The S can very nicely replace an SUV with it’s AWD, and big hatchback area, and air suspension to raise the car.
And it’s really designed well for highway cruising, plus, the charging network.

The S doesn’t have that SUV reverse pendulum effect where a small bump on the road is magnified by your high seat position to really jerk you around.

The “reverse pendulum effect” is a good name for it. I always approach speed bumps etc. at 90 degrees to their longitudinal axis so both wheels are lifted simultaneously, if possible. (my wife is unaware (that) you can do this) I thought “independent” suspensions did away with the problem years ago, but I think they did away with “independent suspensions” instead.

Some of this defies the rules as we traditionally understand them. Increased sales of the 3 should slow the sales of the S but it’s not happening. A nicely equipped, under 40,000 mile used “S” from Tesla is now about $40k or slightly less. If someone was shopping a new 3 and balked when the price rose above $45k or so, the used “S” would be the next option. Put a blindfold on and have someone drive you around in either car, I doubt you could tell the difference, but I’m guessing. Which car will depreciate faster? A new Model 3 or a used Model S? Anyone know? For us now, the big factor when choosing an EV (we’re in the last year of an EV lease, getting ready to buy something) is the charging setup. Level II won’t do, if you’re battery is bigger than 50 kwh or so. Residential code is tricky when it comes to 40, 50 and 100 kw charging machines. I haven’t figured it out yet, but using ‘phased’ power you can get the potentials required to drive those machines, and include a wireless setup too. No sense having a ultramodern car, and a 20th… Read more »

You may be mistaken on level 2. I charge at about 20-25 miles per hour, 4-5 hours and I’m back in the game. Unless you need to fully re-charge more than once with a large battery, I’d say you’ll be fine.

Actually for many people the bigger battery means recharge time matters LESS, not more. My commute is 32 miles a day. On weekends, we may take a 120 mile trip to the in laws. I could easily live off only Level 1 charging! It would take a few days, but the range I lost over the weekend would slowly build back up the first few days of the work week. And for that rare occasion where I come home from one road trip and need to leave on another one the next morning, I can use a local Wal Mart DCFC.

If your current charging rate works for you sith an EV now, so it should with a car with 10x the battery, assuming your driving patterns remain the same. You just top up what yiu used which presumably you are currently (ha ha) doing. . It’s not mandatory to recharge to 100% every time you charge !

Regarding the USA —

In recent months Tesla’s federal EV tax credit getting somewhat close to being cut in half may have helped it.

In the first few months of 2018 the Model S sales were clearly disappointing overall. And Tesla is currently on pace for 3,366 fewer Model S’s sold in the US in 2018 than the previous year.

Considering that Model S and X are still production-constrained by cell supply, I’m not sure sales can even *be* disappointing…

That’s really bad if after 6 years of production, the Model S is still production-strained by cell supply.

Sounds ridiculous.

Not sure it is ridiculous. Has there ever been a car that uses as many cells? – no. Has there been significant growth over those 6 years?- yes. Does every manufacturer currently making EV’s have a battery supply problem? – yes.
Let’s say you can make 80k batteries for the S and X combined in 2017 (too lazy to look up exact number). Are you really going to plan for 120k for 2018 when the Model 3 is coming out and will likely cannibalize some sales – even if that just means slowed growth?
I have a 2015 70D. I would have gotten a 3 if available then.
I think everyone expect the Model S (and X to a lesser extent) to really slow down the sales growth when the Model 3 became available. I am sure the battery making people made the same assumption. And it is true of course, but hard to tell if it was a self fulfilling prophecy. Either way – ridiculous is probably not the right word.
Just had a price increase so they aren’t exactly trying hard to increase sales.

My suspicion is that Tesla/Panasonic don’t want to further ramp production of the 18650 cells, since ultimately they want to transition to 21700 for everything… Which means that until Model S and X make the switch, they are limited to the current production level. That doesn’t hurt earnings too much though, since Tesla is simply moving these models further up-market for now, making more profit from the limited production.

Level II is more than adequate. It doesn’t matter how big the battery is if only driven 50mi/day.

Infrastructure for charging over about 20kw is not available in residential areas nor will a 200A panel support much more

A used model S may depreciate less than a new model 3, but it’ll be out of warranty sooner and after that, any malfunctions are costly to repair, such as those self presenting door handles. That’s why new cars depreciate a lot, because you’re burning through the years of free warranty repairs.

RP. No question, purchasing a pre-owned Tesla Model S (40K miles/$40K$) is quite a value. One factor that may give pause to choosing a used Model S over a new Model 3 may be the the price and availability of extended warranty.

I sent to the model 3 presentation in Paris this week. The interior is small/tight . Design is not my taste even in real life, I really prefer the S, the 3 does not look better than in picture. Screen seems small due to the bottom menu bar, seems more like a 13” screen but it’s ok.

I sat in the model S right after and I prefer the S. I will likely buy a used model S, just to say that they are many nice things in the 3. Range, efficiency and prices are awesome but I was rich enough a new S is not bad deal, it’s too expensive compare to the 3 but I understand why sales are not declining.

That must make you an outlier in Europe where many complain that the Model S was just too damn big for their narrow streets, garages, parking spots, etc. The average European car is smaller than the average American car.

I think this point is overrated. While the *average* car is surely smaller in Europe, there are lots of Mercedes S-Class, BMW 7-series, Audi A8 etc. here as well, that aren’t any smaller than the Model S AFAIK.

FWIW, while the Model S is certainly not a small car, I’ve never got the impression that it sticks out from other cars in normal parking spots along the streets…

Varies a lot by country..

Had the same thought. In the US, it varies by zip code. Where I live it isn’t an issue, but in the Bay area, it is.

Spec. “…the Model S was (is) just too damn big for their narrow streets, garages, parking spots, etc. The average European car is smaller than the average American car.”

Compare apples to apples. Compare the Model S to similar BMW, MB, MD, Jaguar, Lexus, Maserati all will be a tight fit.

Glad you have options, Mr. Gaillard.

In the US that might be true in the short term, but the Model S is on pace for 3,366 fewer cars sold in 2018 than in 2017.
But they will probably get a good bump in December due to the EV tax credit being cut in half.

Tesla has done a spectacular job with its brand.
However, as the article also indicates, the current cohort of Model 3 owners may have expanded beyond the “wealthy few” – but only to the “doing okay-plus, and able to stretch quite a bit”.

As can be seen from waitlist dates and from Tesla’s own marketing moves in recent months, this is not quite enough to hit mainstream. The “stretchable” part of Model 3 waitlist in North America has been nearly exhausted, at least for stretching to $50+k. On the upside, given the spectacular brand performance, any downward movement of the price point starts eating into the bulk of the market’s economic capability curve, and will dramatically expand Model 3’s potential market.

Hence the hasty rollout of the $4k cheaper midrange version. I wonder when the still-mandatory $5k premium package will be removed; unless the Federal rebate law changes, it will likely happen early in 2019, to offset the rebate cut and to keep the sales momentum going.

The auto industry has also constantly worried about people who could afford a BMW 3, driving a Honda Civic.
Part of that is repair shock.
I know 2 BMW loyalists who make right up there in the 5% income bracket and still don’t like $3000 repair bills.

Tesla gave them a reason to buy a clean for the environment and superior performance car.
And they pulled the trigger.

I’d say part of GM’s problem with the Volt is buyer skepticism that GM can give this car a good repair track record.
Although Consumer Reports seems to show continuing better reliability of the Volt.
Climbing from worse than average, to average.
If they continue that trend, into above average, the Volt might start to have some real demand.

It’s a comic-tragedy from GM, (Chevy) because the Volt was never meant to be. Plus, it’s not environmentally friendly and continues to pollute. All hybrids are contrivances of the legacy car builders to sustain the petro infrastructure and “ease” ICE car builders into Electric car builders. They hope to also control the rate of transition. The Volt brought more new customers into Chevy dealers than anything they’ve ever released, so they built more of them. I’d like the know the real fuel consumption stats on those cars, it depends on how and where you drive them. Plus they need maintenance from time to time, which EV’s don’t. (my experience after six years of a Spark and a Fiat 500) The whole business was forced on Chevy, (GM) by Jerry Brown, when he insisted they build some Zero Emission Vehicles, and they cobbled together the Spark from off the shelf parts. The Spark turned out to be a 911 slayer, and handle like a formula one car, I don’t think they had any idea what they were getting into. They could have/ should have built more Sparks, but building and selling pure EV’s was contrary to their profit machine’s programming at… Read more »

In the spirit of what you’ve said, I have long considered the hybrid to be an evolutionary (for cars) missing link, something that lasts a very short period time. I am, of course, very wrong, as most manufacturers are content to rest on the odd chimera.

You are not wrong, Yes there is a big push by legacy automakers to pursue PHEVs instead of BEVs because that is the easiest path for them, but they do not drive the market as much as they used to. PHEVs are a stepping stone to BEVs and most customers will only purchase one or two before making the transition. PHEVs will be a dying breed in 7-10 years.

Not sure it will even take that long… If VW makes true on their promises, there will be very little incentive to buy a PHEV pretty soon, when they offer BEVs with decent range at a price point that should actually undercut most PHEVs…

It looks like the Koreans Hyundia and KIA are going to have a bigger impact on the market than even VW. They are already bringing compelling affordable BEV’s to market NOW and they are expanding production and improving performance fast. In fact, they are not too far behind Tesla in terms of capability but are much cheaper.

So VW is running fifth behind Tesla, Hyundai, Nissan/Renault.

That is behind the US, Korea, France/Japan. Who would have thought!

Agreed that plug-in hybrids make sense until the charging infrastructure catches up. As of this writing, there is one EVgo high speed DC charger within 20 miles of where I live, though one of the Chevrolet dealers nearby is in the process of installing a (50 KW?) DC charger to support Bolt sales.

Things are getting better slowly. I saw a Level-2 charger not far from a buggy hitching post in front of a B&B in Holmes County, Ohio last summer. Holmes County is a strongy Amish enclave.

Your main charger is in your garage so you don’t really need one unless you travel long distance.

Let’s stay a little closer to the ground shall we? I love my Spark EV (my second one) and it is quick and nimble, but in no way is it a 911 slayer nor is the handling like a formula car. It’s a quick rip on the most basic ICE econobox that is saved by the brilliant electric drive train.

It’s true the Volt is technically a plug in hybrid but I think for most it functions as a true BEV with a true mid 50s miles per charge and even more in city driving. I rarely use the gas generator/engine and when I do the gas only mileage is almost 40mpg. Really quite a good vehicle but I agree it would be better with no ICE but just a Bolt size battery, rear wheel drive and maybe a little more ground clearance.

I have my 3rd Volt now, and prefer the PHV over a pure BEV. I live in a mid-sized city and although the city has installed more than 12 level-2 charging stations (free charging!), there are still only 20 locations total for a population of more than 1 million. I have a total commute of 6 miles per day so I almost never use gas, but regular trips of 3-400 miles would be impossible with the lack of charging infrastructure. FWD/AWD is mandatory given the 90+ inches of show we receive annually.

EVs do need at least some maintenance, but under good conditions not as much maintenance as gasoline and hybrid cars. There are routine consumables such as friction brake shoes, HVAC & traction motor coolant, cabin air filter, 12 Volt battery, final drive lube, etc. My prior LEAF EV stuck me with some big bills (see above). Chevy Volt, Prius Prime, and BMW i3 RE make sense for urban dwellers becuase despite their smallish traction motor batteries, they can still drive 20 to 40 miles strictly on electric. These models deal with the current reality in the US, high speed charging infrastructure is seriously lacking outside of locales that are EV adoption hotbeds. One of my friends has a Prius Prime and gets close to 60 MPG for highway cruising. I am not sure what how much use it would take for his Prius Prime to be a net environmental win. Even given Tesla’s aggressive infrastructure build out, it is not possible to take an extended trip to any random spot in the continental US with zero prior planning. On the other hand, gasoline is virtually universally available anywhere. It is possible to get in a gasoline powered car and on… Read more »

Lol. Brake shoes.

I bought one of the first Toyota Avalon hybrids (2013) and enjoyed it for 5 years. I then bought a Tesla Model S with the 100 KW battery. What a difference in performance. It brought the thrill of driving back. The Tesla Supercharging network is fantastic. The only problem I have experienced is that many of the Superchargers were set up for the early Tesla’s with the smaller batteries. On open roads I can go 250 to 275 miles with a 100% charge. But since many Superchargers are set up at a closer distance between them, I do have to stop a little more frequently than I would if the Superchargers were set up for the newer chars with the larger batteries. As for planning, if you put your destination in the built in GPS, it will tell you where you need to charge and how long each charge will take. I get free charging at the Superchargers, but even if I had to pay, the California rate Tesla charges is less than what I have to pay for electricity at home, even at the lowest tier.

I know what you mean about BMW repair prices. A friend has a BMW 5 series and had to pay hundreds of dollars to get the 12 Volt battery replaced by the dealer because the car had to be, “reprogrammed,” for the replacement battery. I am just taking his word the battery was not user serviceable for most users. I guess there is no going to Walmart for a $60 Everstart.

I had a Nissan LEAF and was quoted $2,500 for a brake master cylinder to fix a bad ultra capacitor on the electric boost control board and also $2,500 to replace a burned out water pump. I decided to live with the ultra cap problem because it only affected key-off pedal application and replaced the water pump myself for $450 (still expensive!). I would consider those pretty stratospheric costs for fairly simple and routine failures. I wonder if there is similar repair cost opportunism going on with Tesla? I’ve since switched to driving a Chevy Bolt; nothing has broken yet and there is still warranty remaining, so it remains to be seen if Chevy has high repair bills.

Why does a Leaf have a water pump? For the cabin heater?

I had the same question

Tesla also triggers a code, if you disconnect the battery but I bet you can limit re-programming if you “graft” in a spare 12V supply while changing to a new battery. Just don’t let volts drop. That’s my plan, anyway (almost 4y/o). Tesla’s less avoidable cost, without close second, is the MCU or head unit. The frequency seems higher with cars in hot climates, but it is a 3-5k setback. Hopefully the cottage industry of refurbing them keeps taking off, since we’re only a little more than one year into fast growth of cars that are out of warranty.

If it were a BMW, there would be a longer list of repairs that could be up here, or close seconds. Engine lights, etc.

I think this is going to be a shock to a lot of those stretchers buying a Tesla.

They do the calculations on fuel, and buy with their heart (i.e. they want a “Tesla” because it’s a Tesla, or because of what it represents) and then they will come to their first maintenance schedule (assuming they actually follow Teslas recommendations, rather than just ignore them like a lot of EV drivers) or first out of warranty repair. Boom, that’s $3,000 please.

Tesla is a premium brand and those migrating from a brand like Honda with much lower repair costs may well not like the premium repair costs.

I’m pretty sure my dad did not have yo order the premium package on his midrange.

There are no Model 3s yet without the Premium Package. There’s no “option “ for anything else, so in the configurator, it’s just defaulted.

I’m “pretty sure” you didn’t ask your dad before posting this. The PUP (Premium Upgrade Package) is an “option” which has been mandatory since Tesla started selling the Model 3. Sooner or later, Tesla will make it optional… but pretty clearly it’s “later”, not sooner!

Then he would be the first which didn’t 😛

Aren’t GM and some other legacy car builders lobbying the feds now to extend the credits? GM usually gets what it wants from the feds, they seem to have a private connection. Anyway you look at this, the demand for EVs will constantly increase, car-builders will scramble to make sense of it, while Tesla cruises to victory because they pay attention. Not only is BMW losing sales to Tesla, look at their EV program. Non-nonsensical from the start. Look at Chryco’s effort; Non-existent (almost). ICE car manufacturers are quoted too many times saying things like, “Ferrari will never build and electric car” when what they probably mean is: “Ferrari will never build another car” unless they build something electric. Jaguar jumped in with both feet. Hyundai is severely cutting their grass however, with the Kona EV. $34k versus $85k for a car that is better shows what a different engineering world EVs are in. This is far more exciting then waiting every Fall for the ‘new’ models to come out, then being told the same stuff was “all new” this year. When an EV manufacturer says he has something “all new”, you’d better buckle up.

I seriously doubt that sales of the Kona EV will have any effect on sales of the iPace. It is true that the Kona outperforms the iPace in range but they are in very different categories. Also, we don’t know how they are going to price the Kona.

FYI, the iPace starts at at $70495 including destination with all wheel drive, a lot of bells and whistles, a really nice interior, full tax credit, black OR white paint at no up charge and a bunch of nice colors at a $575 up charge. The efficiency/range is funky but i doubt that pushes anyone to a Kona or Bolt, but rather to an F-pace (gasoline) or a Tesla S or X.

BMW electric program non Existence? Ok I heard it all

Y’know, Assaf, Tesla is already eating the demand that once belonged to $20K sedans (Honda Civic and Accord). They can stretch all the way downmarket without competing on purchase price. The only reason they haven’t make a conscious effort to stimulate that demand is they don’t need the demand yet. Anti-Tesla hit pieces in mainstream media have attempted to lead you to this view – that demand for Tesla is iffy and soon their storage lots will be filled with unsold EVs. Anti-Tesla propaganda is a thing, because Tesla’s business model threatens some of the largest industries in the world: petroleum, automotive manufacturers, dealerships. And Tesla doesn’t advertise, which pisses off mainstream media outlets. There are a lot of billionaires (and their hired politicians) who are extremely annoyed with Tesla. Filter that out. Ask yourself instead what moves are available to Tesla to stimulate demand as their production ramps up. They can scrub their reservations list. Reservation holders have each deposited a thousand bucks with Tesla. Some have gone ahead and configured their vehicles for delivery, but the majority haven’t. Tesla isn’t sure how much demand is actually there; firming that up and refunding deposits for reservation holders who have… Read more »

A leasing option on the 3 is a huge demand lever that they could use.

Don’t forget that Tesla continually upgrades its “Enhanced Auto Pilot”, Maps, and operating system free of charge. Tesla also provides free internet access in its cars as well as free music. Is there any other manufacturer that upgrades its maps and operating system free of charge and on a continual basis?

“…the current cohort of Model 3 owners may have expanded beyond the ‘wealthy few’ – but only to the ‘doing okay-plus, and able to stretch quite a bit’.”

You seem to be trying to cast doubt on the ability of Tesla to expand its market. I’ll make two points here:

1. The fact that so many of Tesla’s customers are doing a “Tesla stretch” and buying cars significantly more expensive than they ever had before, is an indication of the strong appeal and popularity of Tesla’s cars. That’s not going to disappear, and not likely to diminish anytime soon.

2. The whole “Tesla is soon going to run thru its potential customer base, and its sales are going to drop off a cliff” meme has been constantly bleated out by the anti-Tesla “Wolf! Wolf! Wolf!” pack ever since 2012. It hasn’t been true then, and it’s not true now.

I’m not saying that you yourself are a member of the anti-Tesla brigade, Assaf — given your history of posts, I’m pretty sure you’re not. But here you appear to be parroting one of the more frequently repeated pieces of pravduh from the anti-Tesla FÜD-mongers.

I think he’s saying pretty much the opposite: Tesla should have no problem expanding their market, once they start offering the cheaper variants…

Tesla still has Europe and China (after they start producing there) to increase model 3 sales. It WILL be interesting to see what the post any tax credit (unless the law is changed) sales in the US end up being in 2020 when those already on the waiting list have either received their car, postponed or cancelled. Not predicting, just curious.

Thank you, and well said on all points!

A couple of questions though.

What is the cause of the “Tesla stretch”? Is it environmentally conscious and tech addict first adopters doing it – most likely. Is it the mainstream buyer doing it? Probably not so much. Will the “Tesla stretch” extend to the mainstream buyer just looking for a reliable vehicle to buy and own for 3-5 years, or only those looking to own for 10+ years and willing to rent their vehicles out at the weekend(a small minority of car buyers).

And also; what type of manufacturer does Tesla want to be? Do they want to be the BMW/Mercedes of the EV world – higher margin, higher priced, lower volume vehicles, or do they want to be the Ford/Honda of the EV world – lower margin, cheaper, higher volume vehicles?

Both are legitimate business models that make a profit, but a company can’t do both. Will they continue to produce high end cars like the S and the X for $80k+ or will they spin those out/drop them for cheaper $20-30k vehicles?

Of course Tesla can do both. VW does both (and a lot more) just fine.

For most people, the “Tesla stretch” is not just because of hipster creds — the Model 3 in particular gets accolades for simply being an amazing car.

Better car for the TCO. People who can’t plan or save money don’t typically buy a Tesla. The Tesla stretch is simply a negative way to say people who understand TCO. I have an S because over 7 years it costs the same as owning two vehicles in TCO. The perk is I drive an S every day, don’t have to smell it, constantly improving, better service than the local dealerships provide, etc. It’s a lot of things, first and foremost TCO and the fact the car is fun/techy.

They will be both. They are working from the luxury low volume to expanding into the high volume for the lower priced vehicles.

And at a price of at least double of what many can even think affordable. Sorry for the normal retiree it is way out of range.

The average retiree in the USA didn’t plan much for retirement though(consider how much is social security relied on). Not really a good benchmark considering that group isn’t buying new cars for the most part if their income situation is the way you are suggesting. I do agree though based on the sheer fact that 48k is the annual income for a retiree household (not per person) :

At these levels they will buy a used Model 3 keeping the resale value higher as there are those who will see the long term value of the safety features along with low cost to maintain and less maintenance to do especially considering people are less likely to be able to do their own ice vehicle maintenance as they age past retirement.

There are some features that are missing from the Model S. But they could be considered small or insignificant for many who are ready and anxious to jump into the much anticipated Model 3.

Your kidding yourself if you think they are cheaper. Elon Musk promised a 35k but where is it? People who gave a down payment on it have been waiting for years with many changing their minds. Buy from honest car makers instead. A company that will in business….not one that could go belly up in a year or so.

“Honest car makers”… Good one 🙂

Nobody aside from trolls or short sellers doubts that the base Model 3 will come a couple months from now, and that Tesla will be in business for a long time — probably longer than some of the legacy car makers…

It’s fantastic how Tesla managed an average sales price of $60K so far and yet managed to attract so many formerly non premium buyers but is that really sign of a sustainable “Tesla stretch?”. I think we may need to take into account that so far Tesla could draw a disproportional number of big spenders from its enormous backlog but will have to be ready for substantially lower average sales prices as it comes to depend on a more mainstream clientele. I wonder what sort of average sales price Tesla’s arguably closest ICE rival, BMW’s 3-Series manages and how much of a “Tesla stretch” Tesla could manage on top of that if it wants to sell in the same 500K/year numbers 3-Series (almost) manages.

This exact “stretch” is what happened in 2007, only with people buying more house than they could afford because it was a great deal. This time, only their car will be repossessed, instead of their house.

You’re ignoring the fact that many people (like myself) simply choose to spend well below what we qualify for. It’s called being “fiscally conservative”, or should I just say “responsible”. 😉 In the case of the Model 3, we were still easily able to afford it, and simply felt it was worth spending the extra money on.

How many Model 3 on sale on Autotrader. A whole bunch

Oh no! People who thought they could skim a profit off an early one(with tax incentive). I don’t feel bad for them.

Also many are coming from a gas car where they spend another $100 – $200 every month on gas.

Houses have 30 year mortgages, and the mortgage issue was the Deadly ARM.
Cars have fixed rate loans, and a shorter time horizon.
And today they’re more careful with loan risk.
Whereas the backs were more than willing to sell Alt-A mortgages to unqualified buyers, because they were only interested in the mortgage fee, and sold your mortgage 3 months after origination, dumping the risk.

So, banks had NO INCENTIVE to make sure you were a good credit risk.

yeah towards the end of the cycle (2005-2006) the last punters were buying with the hope that they could sell at a profit in 2 years before their suicide negative-am loans blew up,

Most didn’t even have to put any skin in the game, either via 100% LTV or HELOCing the down payment from another property.

Biggest house of cards ever built, we’re talking TRILLIONS 2002-2006:

Mortgage backs securities. Clump you up with all the other mortgage loans

Auto Bubble is real. Interest rates are going up to post 2000 levels. Remember when interest rates for cars were 16% and only 4 year loans

Some of us may have to temporally give up an expensive hobby, until the car is paid off.
But, to drive an electric is like being on vacation every day.

Thank you for underscoring my point as it is clearly not the mainstream buyer but the enthusiasts you are referring to. For sustained 500k/year sales Tesla can’t just rely on enthusiasts, it will have to settle for an average sales price that could generate that sort of demand from more mainstream buyers that will be rather less inclined to do the Tesla stretch. That’s why I think it’s important that even the $35K entry model (that would still have a $40K+ average sales price BTW) is profitable for Tesla. Not that there is much reason to doubt that.

There is a lot of pent up anger associated with legacy auto. Tesla offers a new, fresh approach with amazing vehicles. I think the enthusiasm will breed more enthusiasm, though a less expensive model will clearly help to maintain that attitude.

Agreed. People like REX are the EV equivalent of buyers of BMW M3’s and Nissan GTR’s. Enthusiasts that may well forgo other lifestyle choices for the ability do drive a vehicle they’re passionate about.

They are not the average car buyer, who may want a Tesla, but is not wiling to pay “over the odds” for it, at the expense of other parts of their lives any more than they would any other vehicle.

Hey, great vacation idea. Let’s get the whole fam together. Well, not uncle king. He’ll be driving his ReX around town instead.

We don’t know how many recent orders were actually coming from reservation holders — there have been some claims that many of them weren’t. Lots of anecdotes out there of people who received their Model 3, and within days or weeks several of their acquaintances ordered one too… The Model 3 is so good that apparently it generates *new* enthusiasts willing to do the “stretch” all the time.

Count me among them. My most expensive car till my model 3 was $29,000. My wife’s was $34,000. Now I have a model 3 I spent $50,000 and I could not be happier. The car is a joy to drive and so fast I laugh at all the slower more expensive cars I see daily. Add in the gas savings and I just smile more. Thanks Tesla.

In my opinion, you represent a very HUGE population group. I think there’s a misconception that there’s a lot less folks that can afford the Model 3 than really exist. Looking at the roads, I see loads of expensive turbo-diesel pickups and SUV’s that cost as much or more than the Model 3. Now I’m not saying all those folks will buy a car over a pickup, but the point is that the money is out there, and there’s WAY more left to tap into. Once electric pickups come onto the scene, it’s GAME ON BABY!

The Tesla stretch, is the extremely wide smile stretching across your face, as you accelerate away from the slower gassers, and pass them while they’re stopped at the Petrol Pump getting fleeced with the rest of the OPEC funding flock.

Sadly, I also have a bad feeling that a lot of folks (especially younger folks) have gotten caught up in the excitement around the Model 3 and they have purchased cars they could not really afford. They “hoped” for the $35K car (which was likely a stretch financially to begin with) and then jumped to the $50K+ car w/o really thinking it through. Sure you save money on gas, but it’s not THAT much money. The posts I’ve seen on TMC about 7+ year notes make me cringe more than a bit. Renting your ride out on Turo has its own issues (i.e. vehicle depreciation, risk, price per day is already dropping, etc.). Sigh, Dave Ramsey will have a job for forever….

I agree about the Ramsey factor. But to be fair, I don’t think Tesla has converted formerly fiscally conservative folks over to the dark side- those folks would’ve spent their money anyway vice investing, regardless of Tesla.

Smart money doesn’t burn paychecks away on a car. Your transportation costs should not exceed a tenth of your paycheck. Preferably, they should be far lower. We’re not talking about “fiscally conservative folks” at all. We are talking about people getting wrapped up in a fad and getting onto financial thin ice.

Those same folks would’ve blown their cash, regardless. That’s my point. They simply now decided to blow it on a Tesla. I agree with your philosophy on transportation costs related to income, but that’s not how America works. Folks have been blowing WAY too much for transportation long before Tesla came along.

The Model 3 is not just transportation — it’s fun! If it can make you smile every day, it’s probably worth more than a lot of other investments you could make…

Your idea of fiscal responsibility is very short sighted. You are clearly not including the $30,000 or more per decade owners of large engine large gas tank ICE vehicles are spending on fuel. Plus repairs etc.

If buying a Tesla keeps you out of Vegas for 7 years, then it’s a net positive for society.

Financially sound people don’t really need anything to “keep them out of Vegas”. You’re talking about people who have money problems to begin with.

What you play in Vegas, stays in Vegas, money that is.

Problems like this aren’t exclusive to Tesla as financing like this is now common to the auto industry. People are signing up for 8 year loans which is stretching out the average age of a loan to almost 6 years.

yeah my 2018 Leaf S bought $4500 under MSRP with 0% interest is still $430/mo for 6 years — and this payment is reducing (via debt-to-income mortgage lending guidelines) how much house I can buy by around $60,000.

And it is true at 10,000 miles a year I’m only saving ~$100/mo vs an economical ICE.

But the beauty of BEV is that I get V6 power for very, very cheap (in my case thanks to another $15,500 in gov’t cash incentives).

I bought a $100k Model S at age 23, 3.5 years ago. I only owe $30k now all while continuing to save additional money for the future. You’d be surprised what younger folks can afford.

Paid double than previous cars and well worth it.

i would definitely pay a bit more than usual too.
they just haven’t announced a car that’s right for me yet. waiting for a compact car.

Sorry to say you will wait a long time if you want a Tesla. Their roadmap is well known and does not include a compact. Instead their plan is to drive the price of Model 3 and Y down with more automation and lower cost batteries.

Actually, Elon has mentioned on several occasions recently that Tesla might do a compact car in about five years or so…

(Admittedly, by most standards, that *is* a long time…)

My guess is they’ll pass on the compact. It would barely get any better fuel economy (probably the same CdA), and have barely any lower cost of goods (maybe $1000 less). On top of that, compact cars are a shrinking market, with CUVs taking over.

A hatch 3 would be nice, though. Maybe Tesla will make an “Outback” 3.

“Compact” doesn’t specify whether it will be a sedan, hatchback, or CUV…

Quibble: By my count, Elon has mentioned that possibility exactly twice, not “on several occasions”.

But as you say, it’s not part of Tesla’s near-term plans.

I suspect these Tesla stretch buyers fall into two categories:
1) People who could easily afford to have spent Tesla prices for ICE vehicles but saw now reason to spend more than Camry/Accord prices on a car until the model 3 came out. I certainly would not spend model 3 prices on an entry level luxury ICE vehicle.
2) People willing to spend far more than they can really afford on a car to get a Tesla.
I am in category 1 for sure and hope most of these Tesla stretch buyers are as well both for the buyer’s and for Tesla’s sake.

Also in category 1, here. I could afford 50k, but no 50k car to date has made me want to part with it. So far, no regrets on my 3.

I’m in category 1 also. I have never spent more than $17K for a car, but spent $56K for my 3LR. Best car ever for me. No regrets. FYI paid cash.

Looking at the model 3 facebook group, it looks like it’s really only group 1.
You still have to qualify for a loan.

So rich people. Not mainstream

I’m in category 1: Never considered myself a car person and always looked for the car with the lowest TCO and kept them for 200,000+ miles. The LEAF I purchased in 2012 ($37,000 – incentives) was up to that point the most expensive car I’ve ever purchased – before that I was a Camry buyer. I sold the LEAF (after 6.5 years and 74,000 miles) to get my Model 3. I still don’t consider myself to be a ‘car’ guy, but I am one hell of an EVangelist. I paid cash as well (sold my 1969 Piper Cherokee which I didn’t fly enough to justify owning it).

I am also in category 1 – I can easily pay for Model 3 in cash, but so far my cars were sub-€10K commuter cars.

Reasons why I have preordered Model 3:
* I believe in the need to transition to sustainable (EV) transport
* Model 3 provides better bang for my bucks than its competition
* I made some decent € on TSLA stock so I feel fine spending extra on Tesla car.

Why for Tesla stakes? They got thier money. It’s the bank that be left we the car and loan they have underwrite

I think the tax credits and state rebates help as well. One would get over $10K in incentives in a few states if combining both state and federal programs. Getting a base 3 at $46K means you’re really paying $36K after incentives, and then factor in the gas savings depending on your previous vehicle’s gas mileage. For me personally it’s close to $200/month (93 octane vs electrons) in actual savings, and then add the savings from not having to do oil changes & other maintenance costs associated with ICE cars, I actually come out ahead over 4 years. The math really does work out for the M3 if you’re not traveling over 200 miles daily.

Good point. The “Tesla stretch” could actually stretch $10k less than it appears to do because of incentives.

Are you saying the maths would work out worse for people travelling more?…

I agree with the notion of savings in gas but as some have pointed out, it is not that much to compensate for the additional spend for Tesla. IMHO, there is a coolness associated with the Tesla brand and that is why folks are switching. If you are thinking just economics and environment aspects, a Clarity PHEV Touring edition is a much better deal. We bought one 5 months ago and are yet to visit a gas station 🙂 and the rebates from Fed and State (TX) is 10K bringing the effective price before taxes to ~25K.

For only $10k price difference I don’t think the Calrity is the better choice here. I would pay the 10k to go to Tesla.

I think you are missing the point. A well equipped Model 3 is at least $49K before 7.5K in incentives that will become half at the end of this year.

Ok so $49k vs $35K is $14k. But did you factor in the oil changes and occasional gas use. Over 5 years, that might get the extra $4k. Might not but we are splitting some hairs here.
The fact is, with full incentive, the stretch from a long range PHEV or full range EV is not that great to get to a Tesla.
My wife is far from an enthusiast. She is happy with the 2013 Leaf acceleration. We still might get her a 3 because it isn’t that much more than alternatives. But we do need to consider the Clarity PHEV. She would have to be a gas station break less than 3-4 times a year though.

Not if you do your own maintenance which inmost people where I live do

No it won’t. An oil change is $50 a year (less if you spend the 15 minutes doing it yourself), so that’s $200 over 4 years. And then the additional cost of fuel.

You don’t drive very much. I used to do 3-4 oil changes / year at ~ 5k intervals.

It’s not just coolness that makes it desirable. It’s just a great car by pretty much all accounts…

My point is that I did not stretch my budget to get a environmentally friendly car. I get about 48-50 miles electric in the PHEV and am yet to visit a gas station. Even if I do consume gas on longer trips – the PHEV gives a 45 mile / gallon efficiency. At $15 to $20 K lesser than a comparably equipped Tesla M3, you can be environmentally friendly and easy on the pocket. Also note that the Clarity is a full size vehicle comparable to the Accord or Camry in size.

The Clarity is not full size. Neither is Accord or Camry. When you use the term, you should really make sure you know definitions. It is a bit of a pet peeve of mine. It diminishes your message when you fail to research your words adequately.
While I consider the Clarity an option, it is not an attractive car IMO. The “seamless” starting of the gas engine on strong use of the accelerator is a huge problem. 0-60 is decent but not Tesla like or quiet.

Clarity mid size to full size

And my point is that it’s not just “coolness” that makes people look at Teslas beyond gas savings.

Despite all of the good things about the model 3, it is still ugly, large oversize cabin and a tiny little nose. They should have used the shell of the Model S and stripped it to the essentials and sell it for $35,000.

My previous cars around $25k now i had some savings so I could go up to $50K, same with couple of friends. Imagine guys if your salary went up decently and also if two people earning then it is manageable assuming if the economy is good, but it is better to be prepared for some bad times ahead during 20-22 timeperiod.

When I read about “Tesla killer” or upcoming sales decline I always wonder just how far into the numbers these people look. In 2017 BMW/Mercedes/Audi sold 6.1 MILLION vehicles. 6.1 MILLION…per year. That’s not including Lexus, Jaguar, Porsche and many many others…yet somehow people predict a decline of sales for the hottest car on the planet trying to sell a measly 350,000 in 2019. I just don’t think people truly have a grasp of global size of population, wealth, and volume of cars sold annually.

The most i ever spent on a car before my model 3 was $20,000CAD for a Ford Fusion. Now I’ve spent $73,000CAD for my Model 3.

Tesla stretch? Hell yea!

Yuri Putainamo Yagamushi

Coming from Chevy Volt I’m sold to electric cars. I tried to buy a preown Tesla Model S it seems it’s not that easy to buy this car, dealership always try’s to get the most out of you and if they don’t like the numbers they break the deal like Marin Audi of San Rafael and Bay Luxury Autos in Daly City. I guess this car is not mainstream for a delear to sell it like normal cars. It’s funny I purchased a car that cost more but the deal went smooth, something about Tesla’s.

Buy your used Tesla from Tesla. You’ll be happier.

I’d love a Tesla, but the closed ecosystem-ish direction that they’re heading is not my cup of tea

I don’t understand what you are getting at. Do you not believe we are killing the world with our pollution? Our oceans are dying, when the coral reefs die and algae fields shrink enough, we will be in serious trouble as a lifeform on this planet. We don’t have to wait until it gets too hot.

He is talking about Tesla not allowing third-party service, no third-party apps etc.

“Algae fields shrink enough” (ocean algae) would be a positive environmental benefit, but they appear to be continually growing with more fertilizer runoff from agricultural overuse.

They are actually going in the opposite direction.

I hear you, but I also understand Tesla’s position. Mind you they just released the parts catalog and allowed full purchasing by outsiders. So not sure you can make the argument that they are heading to a closed system. They just became more open.

Why do you have to add that demeaning disclaimer in every Evannex article? Apply your editorial oversight to them and ditch the disclaimer.
You are letting them publish on your site, have the guts to stick with it.

IEVs does not accept compensation from auto makers for the articles it publishes. Since most or all of the Evannex articles published by IEVs amount to soft-sell advertising for Tesla, it’s entirely appropriate for IEVs to include that disclaimer with everything from that source. I think most readers who exercise critical reading would call that “responsible journalism” rather than “demeaning”.

And it’s not like IEVs can exercise “editorial control” when they use an article reprinted from an outside source. Few if any news sources would agree to allow their articles to be edited by some other news site when reprinted there. And few if any writers would sell their articles to any source which would allow third-party editors to edit it as they pleased.

At this point owning a Tesla model 3 is a good buy. I would get another if I could to replace some of the other cars we have. Since all the autos I have owned I held much longer than ten years, I see keeping a Tesla for more than 20 years a viable option. Expect the drop in maintenance issues for new cars, not just the Tesla models, as a major point as to why people will buy newer models.

After looking at Tesla model 3 prices, suddenly, BMW 3er price seem ridiculously affordable.

For those who want less!

Don’t forget to compare it with a 3 series with similar performance, those M3s don’t come cheap either. And once that entry level Model 3 is available the TOC of all 3 Series will look like a ridiculous waste of money.

What could they do with a truck! Pickups are the top 3 selling vehicles in the US.

Not true, just the most popular vehicles by FCA, GM and Ford. Toyota and Honda are at the top.

Do something like this: Allow the full $7500 for the first 15*200,000 cars = 3,000,000 EVs. Don’t do it by manufacturer – whoever builds it gets it. Then lower it somehow. That will reward the early manufacturers and penalize the laggards. I pick 15 to represent perhaps 15 manufacturers that might make a significant number of EVs.

Model 3 is a bargain. It does what the Model X and S can do for half the cost. Plus this is all new tech. Just think what the next generations will bring. Still amazing to me how suddenly a new car company pops up and hits home runs on generation 1 cars with all new propulsion tech. Plus the safest and fastest cars! I own a Model X which I love and love the WiFi updates. Nice to have a car fully juiced up every morning. No more dirty, smelly gas stations. I enjoy how quiet the car is and no petrochemical smells!

Before leasing SparkEV, I was considering getting a used Geo Metro for $1K. It’s not that I can’t afford to get a gas car in Tesla price range (had BMW when younger), but I saw no value in any gasser more than that of Geo Metro.

Really? How about the value of surviving and not being maimed in a crash/accident? The Geo Metro ain’t exactly the pinnacle of safety. Would it even get one star crash test rating on a current test? A new $20,000 Toyota Corolla or similar new vehicle would be much, much safer in a crash.

If you’re so worried about crashing and dying, why even leave your home (or your bed) since you can get killed in even the largest SUV? Irrational fear of life is complete bunk. In the real world, everyone weigh the risks and makes trade off. I ride a motorcycle fully knowing the risks, same is true with Geo Metro or walking the dog.

Live your life, don’t fear it.

If you end up in that wheelchair someday you will have plenty of time to reflect a bit more on that cavalier attitude towards life and health.

Wow, that’s some false dichotomy you’ve set up.

You must admit the Geo Metro doesn’t hold up so well in a crash.

I relate totally…going back in time I had 2 used Geos…a little used fiat…a little used Gremlin… little used Corvair …and other little used low carbon cars. I now have a Model X with most goodies which I bought new trading in a 2014 Model S which was used. Most of my old cars over decades were 200 to 600 dollar cars. I saved a lot of money and carbon emissions. As a 75year old with bone cancer which is from mets prostate cancer And with grandchildren I see the moral cost of ICEs as looming large.

Think about every phone ever made before the first iPhone came out.

Now think about every phone ever made AFTER the first iPhone came out.

The Tesla Model 3 is the iPhone of cars.

What about the Leaf, or the Zoe? They both came before…

It totally makes sense. Although there are other decent EVs on the market, only Tesla has the combo of beautiful designs, a mature EV Operating System, long range, great performance, great DC fast charging port, and perhaps most importantly, the ONLY reliable nationwide DC fast-charging network.

No one else offers all that…nor will they anytime soon. And doing the “stretch” can even make financial sense for many since the savings in gasoline does make a difference in the long haul…especially if you live somewhere with cheap electricity and/or you get solar PV on your home.

I am one as described. I had only paid as much as $36,000 for a car before and paid $56,000 for my TM3. And I am very happy with it!

I’ve seen a great number of reports posted to the Tesla Motors Club forum, and other EV forums, from Tesla car owners saying that they have paid far more for their Tesla car than they ever did for any previous car. That’s a far greater number of such reports than can be dismissed as mere “anecdotal evidence”, so it wasn’t that big a surprise to me when it was reported that the Honda Civic and Honda Accord are among the most frequent trade-ins for Tesla cars.

“Telsa stretch” is a good term for that trend.

Go Tesla! Keep going Tesla!

Of course if you take your sample of a Tesla forum you are not tapping into a typical mainstream buyer pool. To sell the big numbers Tesla needs to appeal to people with less inclination to make a Tesla stretch as well which will no doubt mean ASPs much below current $60K.

If anyone has any doubt go by a Tesla service center and see what cars are getting traded in for Model 3s. I saw a lot of mainstream brand cars and even a fair number of CUVs when I picked mine up. When the Model Y comes out assuming Tesla can produce it in sufficient quantities BMW et all are going to watch their cash cow shrink to rabbit sized.

Good job BMW have several EV’s on the horizon then isn’t it. That along with the production constraints of Tesla mean that’s unlikely to happen.

Um… There’s a whole thread on where people have detailed how they stretched to buy their Tesla, from six years ago. Mr. Banning coined nothing, but I am pleased he was able to share his story all the same.

These trade in stats could be highly misleading. They might be trading in their oldest car to buy a 3. That takes nothing away from Tesla’s success, but if you are tempted to think that “Honda Civic drivers are trading up to a Tesla” you might be very wrong. It would be logical to trade in your least wanted car to offset the high Tesla sticker.

What you are saying is that if you are wealthy enough to own several cars it may be an easy stretch, but I think it still qualifies.

Most families will have two cars.

I guess what he meant is that someone can have a smaller second car like a Civic, and a new 5 series. They trade in the Civic for the Model 3 and then have a 5 Series and Model 3.

This comment makes no sense. Of course buyers are trading in their oldest car for the Tesla Model 3. That’s how trade-ins always work in the car market.

Many Honda Civic/Accord drivers most certainly are trading up to Tesla cars, and that includes the Model S as well as the occasional Model X, not just the Model 3. Probably some Toyota Camry drivers too, altho that’s not among the top 5 trade-ins.

All that says is that a lot of people have been willing to hop on the bandwagon that has been way over hyped. That doesn’t mean that the model 3 is a good buy, or that it is anywhere near worth overpaying for. It’s no different than when the first Chevy Camaros and Dodge Challengers of the late 2000s came out and people were willing to pay mark up prices for those. We have still unfortunately lived in a society of people willing to pay because”everyone’s doing it”, rather than actually being smart with one’s investment. Truth be told, a Prius is a way better purchase for the money, that would save you a hell of a lot more money, even in the long term, than a Tesla Model 3. To each their own, but I personally will pass on the Tesla. To be fair, I’m not a fanboy of the brand anyway…

If lowest cost personal transportation is your only metric, then you are right. But for many zero pollution, high performance, silent motoring, auto pilot and good looks are part of the equation.

The emissions not coming from a Tesla car’s nonexistent tailpipe certainly are quite different from those coming from a Chevy Camaro or Dodge Challenger! You’re certainly entitled to your low opinion of Tesla cars, but it’s certainly no more than a subjective opinion, and pretty clearly one not shared by most IEVs readers.

Also, owning a car isn’t an investment, as you call it; it’s an expense. Treating buying a car as an “investment” is a mistake far too many people make.

Have you taken a test drive of the Model 3? Unless you have, you don’t know what you are talking about. People aren’t paying significant extra for because they think it will save them money down the road — they are paying extra because it’s a great car!

Agreed. If TCO over 10 years is the only consideration one really can’t beat a Prius or if one needs a model 3 sized sedan a Camry hybrid or Accord hybrid. At today’s 4% plus CD rates the interest on the $20K – $30K in savings (relative to the cost of a model 3 you can buy today) would cover most or all of the fuel and maintenance on one of these cars. Even when the $37K+ delivered in any color but black model 3 comes out it is still unlikely to close the $10K – $15K price gap relative to Prius/Insight/CamCord hybrids over a 10 year period especially if one finances the difference, But, the model 3 just drives so well and after driving a Volt find the luxury of not needing to make regular gas station a “necessity” now. I also find the interior very Zenlike and refreshing relative to today’s button and laggy touchscreen festooned cars.

The model 3 appeals to many car segment owners. I am retiring my 1948 Chevy street rod, my only car for 31 years, and will drive this performance model 3 instead as my daily driver. It is well worth the price. Our families first/only new car.

You have been driving a 1948 model as your main car over the past 31 years? That’s kinda impressive…

The question is how long can Tesla keep up, “the Tesla Stretch,” before demand is satiated. Apple has kept people coming back for about 39 years now, so there is evidence some companies can make their customers stretch repeatedly. There is a different financial stake in an expensive $2,500 laptop computer versus an expensive $50,000+ car though. It is probably a lot easier for middle income consumers to get credit card approval for that computer than it will be for the same consumer to get a lender to pony up for a car that costs half a house (here in the Midwest where I live). Then there’s that problem of keeping customers coming back to the feeding trough. The neuropsychologist cited in the article says he plans to keep his Tesla Model 3, “for a long time.” … perhaps because he has to, financially. The depreciation on Tesla models has been fairly brutal which may aggravate the situation of customers needing to retain their cars for a long time to be financially above water. Perhaps the depreciation situation will change if fears of and actual battery deterioration subside. Short of possible road chemical corrosion that we have here in the… Read more »

I don’t think Tesla’s bean counters are all that good at prognosticating market potential. The initial response in the volume of Model 3 reservations was far, far higher than Tesla anticipated.

More recently, the multiple price changes over the past few months for various trim levels of the Model 3 indicate that again, Tesla misjudged the market potential. Price increases likely indicate Tesla underestimated demand, and drops in price likely indicate overestimated demand, for a particular trim level and/or set of options for various versions of the Model 3.

If using Apple as an example you need to consider the iPhone. They released the original just over 10 years ago, and had great success, with sales increasing year on year… until around 2 years ago when sales started contracting. To continue revenue increase they raised the price of their phones (the X), but even now it looks like revenue is also going to start declining. People are holding on to their phones for longer now the step changes aren’t happening in phone design.

Can we transfer that to Tesla? Many of these Tesla stretch people are talking about owning their new vehicle for 10+ years as justification for the high up front cost. How is that going to affect future sales for Tesla?

You could argue the Model 3 is the iPhone 4 of the car world, and by the iPhone 7 sales stalled.

Tesla depreciation is anything but “brutal”. They keep more of their value than any other car in their marketspace.

Oh an battery, you really should look up the data. Unless you’re one of those fact free people.

the same can be said about Audi, Mercedes, BMW otherwise people would not pay 50% more for these compared to a fiat, nissan, toyota….

So….do Audi, Mercedes and BMW get a lot of budget trade ins? If not you are confusing stretching with buying premium.

One thing not talked about much for Tesla Model 3 value is trade-in value 3 to 5 years from now. By then BEVs will be in full swing, and ICEs purchased now will be worth dirt for trade-in, and Auto Pilot will be expected on all new cars and a real bonus on used.

I think anything that screws the gas companies is great, my sole purpose of I was to buy one .
There’s only the niomp9 that catches my attention because it looks like a supercar as supercars only have that look and its handing capabilities. Fast and can handle is what I want , not just straight line speed. I love np9 as they sacrifice speed for extreme driving conditions.
Love car and I don’t see a car thatt can compare. The roadster is strictly a straight line car and would rather have a complete car.

Are you talking about the first Roadster or the new Roadster 2 coming in a couple of years? I believe the original Roadster, with its Lotus roots, was excellent at handling, but its battery size and motor over-heating issues made it a non-starter for the typical 50 mile road race. The new Roadster 2 intends to rectify that.

If people’s motivation to spend $20k now so they can keep the car longer and save money on gasoline and maintenance, that’s some unusual logic, considering it’ll be a good 6-8 yrs until they break even on that extra $20k.

What folly is this? Who lays $50,000 on the counter and walks out?

This is a monthly payment increase. People who go solar and EV, both on monthly payoff vs ICE/Gas/Grid electical payment… there is where we begin to understand the finance. $7500 off the car and 30% off the solar cost PLUS state and local incentives…suddenly this is not such a stretch.

Next we give SOME credence to the fact that Electric motors last decades at 12,000 miles a year. Long term financials say that 8 years in you should have 17 years pf free electricity to go and perhaps 10 years of high functioning cheap transportation.

The “ stretch” on the Model 3 is a repeat of the “stretch” on the Model S. We never spent more than 40k on a car and never considered a BMW, Mercedes, etc. The 160k on our S was an easy decision after driving one. Our next Tesla will not be a high performance version but this one is a lot of fun.

This story is a strech

I’m not interested in buying a car that’s been constant hype with many lies attached to it. I’ll buy one from GM instead, someone I can trust. GM is suppose to be coming out with a whole slue of them in a year or so.

This isn’t surprising. People did the same thing for the S and X (particularly the S). There were many testimonials in forums, and even in comments on this site, where people were driving a loaded Camry or a Sonata and paid twice what they have ever paid in their lives for a vehicle to own a Model S. Nothing really new, but really great news, just the same!!

I bought a new Prius in 2007 and it was a very good car (actually still have it to go to grandson next year). The salesman was unexpectedly awesome too. The funny things is that I kept telling him that my next car would have a plug. He and I exchanged emails over several years and I would say the same thing in my closing. Unfortunately, when I got my M3D in Sep, he had retired )-:

I can confirm this. My first car cost $12,000 at two years old, my second (emergency purchase after an accident) was at $7000. I have been saving up for a Model 3 since 2015 and *for us*, the only real competitor (though with completely different scope, design ideas, expectations and price tag) right now would be the Sion: – But it’s not available yet.
I won’t buy an ICE car again, ever. If Model 3 had failed, I would just have waited longer.

I am one of those people who came from another luxury car to the Model 3. Although I am really enjoying the car. To me it isn’t worth the money. It is just a bare bones car. It’s simple and efficient. But for that price tag there should be some luxury items added to it. They cut corners in places where I think they didn’t have to.