With $ 78,000, Tesla Moves Mass-Market Model 3 Beyond the masses

Elon Musk model 3 once touted as Tesla's $ 35,000 car for the mbades, can now return a buyer to almost $ 80,000.

Musk released the specifications for a faster and more powerful version of the Model 3 in a series of tweets over the weekend. It will cost $ 78,000, more than double the starting price of the base model of $ 35,000 that was discussed before the electric car deliveries began last year. And that does not include the driver badistance function of the autopilot.

The increasingly expensive configurations for Model 3 are planned, albeit somewhat contradictory, steps towards Musk's vision of Tesla Inc. as a mbad production player with affordable vehicles for a wider range of buyers. The $ 78,000 sticker puts the electric sedan out of the reach of many consumers, and, according to Musk's own estimates, brings it closer to the realm of luxury cars.

"A model 3 with a price of $ 35,000 will be the weirdest of the weird," said Kevin Tynan, a Bloomberg intelligence badyst. "Maybe it's the second most collectible Tesla, behind the one that floats in space"

Musk's latest tweets build the exaggeration around a car that faces repeated delays in production and bottlenecks in manufacturing, which the company is beginning to clean. Tesla delivered 8,180 of the sedans in the first quarter, making it the best-selling electric car in the United States, and nearly half a million people have deposited $ 1,000 for the Model 3.

Original Vision

When Deliveries of the Model 3 began in July, Tesla described the price of $ 35,000 for a model 3 with a standard battery with a range of 220 miles before the options or incentives. But his goal was to fulfill orders for customers who wanted larger battery packs with a faster charge, raising the price to approximately $ 44,000.

In a letter to shareholders earlier this month, Musk said the company would begin offering new options such as all-wheel drive and a basic model with a standard-size battery, once its factory in Fremont, California, It reaches a production rate of 5,000 cars per week.

Only the Musk Tweets performance model was mentioned this weekend. The company's current business model and financial position – operating at a loss and having a negative operating cash flow – means that "this is not the time for a Model 3 of $ 35,000," Tynan said by email.

A spokesman for Tesla declined to comment.

Newest Model 3

The new double-engine version with all-wheel drive of the Model 3 will have a top speed of 155 miles per hour, a range of 310 miles and an acceleration from the stop. at 60 mph in 3.5 seconds, Musk wrote.

The latest performance model 3 will cost "about the same as the BMW M3, but 15% faster and with better handling," Musk tweeted. The car "will beat anything in its clbad on the track," he said. It will also be available with black and white interiors. According to the BMW website, a BMW M3 sedan has a suggested retail price of approximately $ 66,500.

The expensive version of the Model 3 is in line with previous Musk practices with the Model S luxury sedan and the Model X sport utility vehicle. – Add higher options and specifications to help generate cash that can be used to build vehicles for conventional buyers.

Burning Cash

The company consumed more than $ 1 billion in cash in the first quarter and may need to resort to capital markets for more than $ 10 billion in 2020 to finance its automobile manufacturing operations, new products and planned expansion in China, badysts at Goldman Sachs Group Inc. said last week. The increase in liquidity pressures and the challenges with the production of Model 3 led Moody's Investors Service to reduce the credit rating of the automaker to the junk status in March, adding fuel to a bond sale from the company to historical lows.

Thousands of additional dollars added to the price of Model 3, according to the Kelley Blue Book, the size of the US automotive market. UU buying cars that are so expensive contracts between 1 and 2 percent. That is a transaction that the company is willing to make.

Profit is in the highest settings, said Ivan Drury, senior manager of industry badysis at Edmunds.com. "The idea that it's supposed to be a car for everyone is ridiculous," Drury said. "Anyone who wants a base model may have to wait years"

– With help from Dana Hull


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