Tesla Expands Its Model 3 Offerings—At a Steep Price

In his grand goal to bring electric driving to the masses, Elon Musk has been doing his best Henry Ford impression. To date, that has included his own take on Ford’s famed quip: “Any customer can have a car painted any color that he wants so long as it is black.”

Since starting Model 3 production last summer, Tesla has simplified its production process by limiting its customers’ choice to a single variant of the sedan. With a larger battery and premium upgrades, that version starts at $56,000, well north of the much-touted $35,000 base price. (Buyers do get their choice of six colors, though.)

Now that Tesla seems to finally be emerging from “production hell,” Musk took to Twitter this weekend to reveal a series of new options for prospective Model 3 owners. The dual-motor setup that enables all-wheel drive is now available, for an extra $5,000. So is the performance version of the car, with extra-blistering acceleration, starting at $78,000.

These price tags are frustrating some less wealthy drivers who are eager to buy a Musk-mobile for $35,000. (Insane! They might say. Ludicrous!) “Outing a $78,000 version of the Model 3 long before the $35,000 base trim is in showrooms is a misstep and demonstrates a lack of appreciation for the mainstream new-car buyer” says Rebecca Lindland, an auto industry analyst with Kelley Blue Book.

Musk justified the long wait for people wanting the cheaper car (some of whom stood in line outside stores back in March 2016 to put down their $1,000) by saying the company has to focus on higher profit margin models at first, or it would “lose money & die.”

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Exacerbating the problem is the fact that Tesla will soon lose access to the $7,500 federal tax credit for low- and zero-emission cars, which starts to phase out once an automaker sells its 200,000th qualifying vehicle in the US. Offering the high-end variants of the Model 3 now means buyers waiting for the $35,000 car are less likely to benefit from the government’s largesse. And they’re the ones to whom $7,500 can make a major difference.

(Over the last few days, Tesla has told customers who have made it to the top of the waiting list that their deliveries are being pushed from June to July. The automaker says that’s because it got an unusually high number of orders, but it might also push that magic 200,000th delivery to the start of the third quarter of the year, delaying the point at which the tax credit starts to phase out.)

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