Tesla has stopped the sale of its promised $35,000 Model 3. The much-awaited 2021 Model 3 is set to have a lot of new features. We reported the launch of this model 3 last month. At the time, Tesla had listed the $35,000 Model 3. However, the company has tracked back on the cheaper model. This isn’t the first time Tesla has stopped the sale of this product.
Tesla Discontinued the Sale of $35,000 SR Model 3 with New Refreshed 2021 Model 3
The timeline of $35,000 car
Long before the Model 3 was launched Elon Musk had promised a cheap priced car. $35,000 was the set price point. Back in 2015, Elon Musk told multiple times that Tesla will deliver a cheaper car. Elon also made assurances of this on Twitter.
@elonmusk $35k price, unveil in March, preorders start then.
— Elon Musk (@elonmusk) September 2, 2015
In April of 2016, Tesla finally unveiled the Model 3 in California. The long wait seemed to be over. Tesla matched their bold pricing. Elon added that the deliveries would begin by the end of 2017. The car was coming to life ten years after Elon had revealed his “master plan” in 2006
- Build sports car – The Tesla Roadster
- Use that money to build an affordable car – The Model S
- Use that money to build an even more affordable car – The Model 3
Tesla built up a preorder list of over 400,000 customers based, at least in part, on that promise. Those customers each put down a $1,000; too, giving Tesla some $400 million in cash to help buoy its business without having to sell equity in the company or raise money that would add to the company’s expanding debt.
Delays in the promise
Tesla had issues in increasing the early production of the cheap Model 3. Hence, they canceled their plan to produce the cheap model 3. Elon Musk had famously called it the “production hell”. To revive the master plan, Tesla first manufactured the higher-priced version of Model 3.
2018 was the year everyone expected the promised $35,000 car. Elon on a call said, “Our goal really is to make electric cars that everyone could afford. If we can produce the $35,000 car today, we would do it. We need more work, there is more work to do before we can make a $35,000 car, and has been a positive gross margin. We’re probably less than six months from that, but that’s our mission.”
However, people had to wait another year for this. In early 2019, Tesla finally launched the cheaper Model 3; the Standard Range Model 3. It offered a single-charge range of 240 miles, a top speed of 130mph. However, the promise didn’t last long.
In April 2019, Tesla scrapped the $35,000 route. Tesla removed the Standard Range Model 3 from its online configurator. Via a blog post Tesla said, “Given the popularity of the Standard Plus relative to the Standard, we have made the decision to simplify our production operations to better optimize cost, minimize complexity and streamline operations. As a result, Model 3 Standard will now be a software-limited version of the Standard Plus, and we are taking it off the online ordering menu, which just means that to get it, customers will need to call us or visit any one of the several hundred Tesla stores.”
A different $35,000 Model 3
Tesla continued the sale of $35,000 car online. Instead of the Standard Range Model 3, they offered a downgraded standard Range Plus. The $35,000 standard range plus had some locked features. These models were available for the customers over the past year. However, news broke that Tesla informed its staff that they weren’t allowed to “downgrade” new 2021 Model 3 vehicles to “Standard Range” and sell them for $35,000. Tesla plans to sell the software limited Model 3 SR plus that are in the inventory. However, this option won’t be available on the 2021 Model 3.
I feel that the $35,000 Model was launched just because Elon had promised it multiple times. Tesla probably never had their heart set on the particular model. The constant delays and makeshift plan to offer a cheaper Model 3 suggest so. However, this doesn’t mean that Tesla is deviating from its master plan. On battery day, Tesla announced the $25,000 Model S Plaid. I think the reluctance to offer a downgrade is to increase sales of the 2021 Model 3. Maybe in the future, the $35,000 variant will be “on the menu” again.