CC Newsstand: Tesla Delivers Its Long Promised $35,000 Model 3 And Upends Its Current Retail Sales Model

Earlier today Tesla froze online orders for its entire lineup and teased that a major announcement was imminent. Turns out it was basically three big reveals. The cheapest Model 3 is now a reality. Unfortunately, a whole bunch of layoffs are too, as Tesla will shutter a significant number of its stores and transition the remaining ones to showrooms. The automaker is also going to transition to an online-only retail system. A Model 3 based crossover, the Y, will also be available in the future.

Is the Model 3 really priced at $35,000 now? Yes and no, depending on your outlook. Base price stands at $36,200 when including destination and a doc fee. Both of those charges have always been a bit arbitrary, but every other automaker currently prices their vehicles the same way. And since Tesla doesn’t currently offer franchised dealerships, they’ll be happy to charge you a doc fee themselves. And of course the final price is affected by the incentives offered by your home state.

What does an entry level Model 3 get you? A 220 mile range battery pack with a 5.6 second 0-60 time. Not too shabby at all. An extra $2,000 gets you 240 miles, a 5.3 second 0-60 time, and some more interior amenities. The mid range battery back will get you 264 miles on one charge but you have to step up to the premium interior to get it. The longest range Model 3 comes in at 325 miles while an all wheel drive variant shaves fifteen miles off that number.

Aside from the battery pack, it seems the company was able to shave the price off the 3 by cutting the interior options down to more basic configurations. Fewer speakers, cloth seating with manual adjustment, and overall trim adjustments are the name of the game here. Although a lot of this stuff is vague, so you may want to see one in person before you buy.

The basic Model 3 requires some sacrifices, but the no frills aesthetic of every Tesla interior will minimize the major differences between the basic and fully loaded trims. Having nearly the same infotainment system on board helps too.

The exterior is largely the same minus a pair of LED fog lights. Tesla charges for any color other than black, and they seemed to have purposely made the base wheels a bit homely in order to encourage customers to spend $1500 on the upgraded 19 inch “Sport” wheels, but those two things have been baked into the car since the beginning.

A more complete self driving Model 3 (and presumably the Model S and X too) will also be available later in 2019. This obviously isn’t included on the base model, but all of its enhancements are noteworthy. By 2020 you’ll apparently be able to order a fully autonomous Tesla that can drive on the highway and in stop and go traffic and park itself when you’re done driving. That same car will apparently also be able to be summoned, provided you’re actually in the parking lot.

This means we’re one step closer to owning a car with similar capabilities to Bond’s enhanced BMW in Tomorrow Never Dies. Although the real paradigm shift won’t happen until we can drive a Tesla via remote control from the back seat. I’ll keep dreaming.

Unfortunately these new developments will result in employee layoffs. The company is radically shifting their footprint to an online only sales strategy and they’re going to close a substantial number of brick and mortar stores to accomplish that goal. Tesla’s brand is strong enough to survive the change, and its impossible to deny that their prohibition from selling in most states and in limited capacity in others is what prompted them to ditch a more traditional showroom setup.

Tesla continues to face a number of challenges as they seek to expand. The company anticipates a loss in Q1, but said that a profit in Q2 was “likely”. Tesla needs to spend money to launch the Model 3 in China and Europe as well as continue development on the Model Y, Semi and Roadster. It just broke ground on a new Gigafactory in China.

Quality control has not been the highest priority at the company and there are reports of their customer service not being able to meet the growing number of customers that the Model 3 has brought in. Elon Musk continues to be a bit of a dick and may be facing additional repercussions from the Securities and Exchange Commission because he cannot suppress the desire to tweet. Competitors like Rivian and industry stalwarts will begin to steal the spotlight with electric vehicles of their own.

But the company has beaten the odds before. And they’ve introduced a 7 day, 1,000 mile return policy for all future purchases. Companies like Carvana have similar policies that have resulted in success for their respective businesses.

More importantly, Tesla remains a desirable brand on the merits. And while hiccups may continue to dent its operations, as long as people want to buy one, they’ll be around in one form or another.


“Tesla finally launches base Model 3 for $35,000 with shorter range and new interior” – Fred Lambert, electrek

“Tesla changes entire sales strategy, makes sales online-only, closes stores w/layoffs” – Jameson Dow, electrek

“Elon Musk say Tesla unlikely to be profitable this quarter, TSLA stock falls” – Seth Weintraub, electrek

“Carvana, known for its car vending machines, is expanding into N.J.”South Jersey Times

“When Elon Musk Tweets, the SEC Chastens”The Motley Fool