Tesla Introduces Long-Promise Model 3

Tesla finally launched its long-promised Model 3 earlier this month.


Tesla finally launched its long-promised Model 3 earlier this month but it still not delivering them according to many media and owner reports.

In the call launching the Standard Range Model 3, Tesla CEO Elon Musk said the first cars would be brought in two to four weeks. However, customers who have ordered Standard Range Model 3 cars have reported on at least three different Tesla forums that they have received texts from Tesla saying their deliveries have been deferred, and been given no updated delivery date.

As it launched the base Standard Range Model 3, Tesla also announced an unanticipated new model, the Standard Range Plus, with 20 miles of further range and Tesla calls a Partial Premium Interior.

In the base Model 3 announcement, Musk said that the company would close all its stores to cut sufficient prices to generate a return on the base Model 3 at $35,000. Since then it has inverted that decision and reopened most stores.

It has also raised costs on all of its other models to offset the losses from leaving stores open and building the $35,000 Model 3. In a blog post explaining the measure, the company said, "We will only close about half as many stores, but the cost savings are therefore only about half.”

In the introductory call, when a news agency asked when new customers may get the sedan, Musk said, "It is very likely that someone who orders will get the car in the US by the end of June, let's say. Before the next tax-credit cliff."


That timeline is critical, because Tesla's vehicles are now eligible for only half the plug-in car tax credit that those from most other carmakers are, and some others now sell for the about the same nominal $35,000 sticker price. On June 1, Tesla's tax credit will tumble by another $1,875.

The tax credit could be particularly significant for cost-sensitive customers seeking a rock-bottom cost on a new Model 3.

There could be another reason that the Standard Range Model 3 is deferred even while the Standard Range Plus is not. While the Standard Range Plus is essentially a decontented version of the Mid Range Model 3 that Tesla sold from November through February.

The entry-level Standard Range vehicle has more industrial differences from other models, including fully manual seats with cloth covers not offered in some other Model 3, and a different center console.

Those are parts that may take longer for the corporation to rise up from suppliers. And it might be that in addition to generating less income, the base Model 3 might expand manufacturing price and complication.

Tesla's original accounting for Model 3 prices and profits was certainly built on Musk's assumption that his totally automated "alien dreadnaught" assembly line would dramatically cut production prices—a forecast that famously did not turn out last spring as the company struggled to rise up production of the Model 3, ripped out parts of the automated assembly line, and hired employees to replace them—then built a separate, less automated line in a tent outside the main factory.

The prices of those extra employees could still be pinching the Model 3's bottom line, even after Tesla made redundant more than 9 percent of its managerial and engineering staff to save money.

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