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The actual cost of Tesla's new “$ 35,000” model 3

It took a while, but Tesla Inc. (TSLA) finally revealed a more affordable version of the Model 3 with its…

It took a while, but Tesla Inc. (TSLA) finally revealed a more affordable version of the Model 3 with its mid-range. The shares were at the beginning of the news, but have since dropped about 2.6% to $ 257 approximately one hour before closing. The causes of the drop vary.

CEO Elon Musk is one step closer to making his dream come true when he revolutionizes the automated world and drives the world towards a clean energy future. While there are still some questions about the vehicle, it is undoubtedly a victory for Tesla and Musk.

Tesla Base Model 3

On Thursday night, Musk tweeted that the 3-inch model costs $ 35k for federal and state tax reliefs in California, but true cost of ownership is closer to $ 31k after gas savings. “

That may be the situation in California, but in reality, the deferred cost is actually $ 45,000 before federal and state incentives. With only the federal tax credit of $ 7,500 for electric cars (EV), the price reduces to $ 37,500. However, the tax credit will fall to $ 3,750 for the first half of 2019 and again to be reduced by 50% in the second half of 2019. It will then be eliminated for Tesla vehicles, now that the company has delivered more than 200,000 equivalents. 19659002] The website says delivery estimates are for 6 to 10 weeks from now, which would land the current Tesla middle class right near the turn of the year. Provided that a majority of drivers take delivery after January 1, the cost of those who buy in states without other incentives is actually 41.250 dollars. Tesla is caught in a situation where it wants to offer a low cost all-electric vehicle but must also consider the bottom line.

For the sake of clarity, TheStreet spoke with a Tesla rep who said that the standard battery is still four to six months away (as stated on the website). The standard battery will have a smoother driving range than the 260 miles in Space Model 3. It’s likely to come with a lower price tag, perhaps getting Tesla at the $ 35,000 incentive-free price or at least close to it.

Can not satisfy the bear

Musk said his goal was to bring a vehicle of up to $ 35,000 to the electricity market. Why it meant that he had or he was a fraud, I do not really know. General Motors’ (GM) Mary Barra or Ford Jim Hackett would not get ribs if they got any of that brand. Of course, the middle-level $ 45,000 (before incentive) is not as closes either, but there is still one model 3 coming. At $ 36,000 or $ 37,000, it’s pretty close to Musk’s original goals.

The management teams set goals and sometimes the short goal arises. Whether it’s the case with Teslas Model 3, we do not know yet. Many bears said that $ 35,000 Base Model 3 would never come and yet, we are making progress towards that goal.

So now the argument changes to profitability, gross margins, headaches in production and anything else they can merge. I’m not trying to take sides with Tesla here. Its economy is one thing – a mess, for sure – but why can not we give credit where credit is due?

For one, Tesla’s vehicle is safest on the road, according to NHTSA. Secondly, model S and X are luxury all-electric offers. Even after being in the market for year the competition can not be captured. With electric debut from Porsche, Audi, Mercedes-Benz and BMW 2019, 2020 and later, these car manufacturers simply can not beat Tesla.

They have had years to catch up, more access to R & D capital and decades of experience in vehicle development. But even then, the upcoming cars at best have comparable specifications for Tesla’s current range.

So why do not we give credit where credit is due: Tesla does some amazing products and continues to improve their methods. If it did not have a suboptimal economic situation – and that puts it mildly – this company would be a slam dunk. Thus, we must also pay attention to their shortcomings, but this is a positive step towards expanding the company.

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