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& # 39; Tesla Stretch & # 39; pushing customers to open wallets for model 3s

(Bloomberg) – For Earl Banning, behind the wheel of a Tesla, the expenses meant more than he ever had on…

(Bloomberg) – For Earl Banning, behind the wheel of a Tesla, the expenses meant more than he ever had on a car.

The 43-year-old Air Force from Dayton, Ohio, pounded $ 54,000 for a model 3, expecting to save on gas and keep the car long. It was almost double what he previously paid for a fully loaded Honda Accord.

“I call it Tesla Stretch – all I’ve met who own a model 3 are willing to spend more to get into a model 3,” he said.

When Chief Executive Officer Elon Musk first revealed Model 3 at a late night party in March 2016, the vehicle was expected to compete on premium since the market against likes like Audi, BMW, Lexus and Mercedes. Instead, owners of mass market cars like Honda Accord and Toyota Prius open their wallets for later, indicating that the vehicle pushes Tesla in addition to its luxury niche and more in common.

Model 3 is the key to Musk The goal is to gain profitability for the 15-year-old company, who has struggled with production problems and self-controversial controversies. The car is particularly popular with younger buyers and Musk has pointed out that customers pay for it as proof that the brand Tesla is still strong with consumers.

“Tesla has captured flash in a bottle,” said Jeremy Acevedo, director of industrial analysis at Edmunds researcher, in a telephone interview. “It’s hard to even benchmark Model 3 against other cars because it has broken mold in so many ways.”

Tesla recently said that more than half of the Model 3 bets were from vehicles under 35,000 dollars. And there are signs that the popularity of the sedan puts pressure on rival automakers who are already rushing from Americans’ movement towards lorries and sports vehicles. In October, the sale of cars like Accord and Prius continued, as model 3 deliveries fell. The ban, the air force psychologist, received $ 16,000 from Tesla to trade his Prius, an offer slightly above the Kelley Blue Book value.

The cheapest model 3 available now starts at $ 46,000 before any tax credits and features like $ 5,000 “Enhanced Autopilot” can boost the cost.

For Eric Snapat, a 36-year-old from Burleson, Texas, it was “a little scary” to spend almost $ 60,000 on a Tesla. He used to drive a Nissan Altima, but now carries a six-year loan on a model 3, a cost he can motivate because he and his wife do not have children.

Rent Model 3

Other drivers find ways to offset the cost. Turo, a shared marketplace, has more than 4,000 Tesla vehicles, including approximately 1,000 model 3s, listed on the platform. In 2014, only 67 Teslas was offered.

Robert Preston, 26, bought a model 3 at the end of July for $ 56,000 and charges renters $ 155 a day to use the vehicle. It is popular with urban residents on road trips, travelers and potential customers who want an extended test run.

“Every weekend I have someone renting it,” Preston said.

From the start, the model 3 was thought to be cheaper. Musk originally said that it would cost 35,000 dollars before options or incentives. But that version is not expected to go into production until next year, and the polarizing CEO has made it clear that Tesla has to focus on selling advanced versions first in order for the company to survive.

“I think they’re still going to make a $ 35,000 version, but they’ll configure it so nobody will want it,” said Gene Munster, an analyst at Loup Ventures.

There are also Questions about whether car demand will be as strong once a federal tax credit for electric cars is cut in half next year to $ 3,750.

Still, some potential customers are hoping for the cheaper model. Ray Nash went up at 2.30 to be among the first in line with booking a model 3 at the Tesla store in Santa Monica, California. It was back in March 2016, and he is still waiting.

“I’m on Elon’s promise,” said Nash. “It’s really bitter sweet to see all Model 3s run around the city when I was one of the first to place a deposit. But I still love what the company does and I fully support the mission. “

To contact the reporter on this story: Dana Hull in San Francisco at [email protected]

To contact editors responsible for this story: Craig Trudell at [email protected], Craig Giammona, Kevin Miller

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