How the New $45K Tesla Model 3 Stacks Up to the Competition
While journalists and stock-market watchers have warned of coming “Tesla killers” for years, we’re still waiting for a legitimate one to arrive. So far, no one’s come close to the 335-mile Model S performance electric sedan, and it’s not terribly close. Tesla deserves all the credit it gets for its flagship EV.
Likewise, the company deserves most of the criticism it’s gotten for the clumsy roll-out and quality issues of the Model 3 sedan. We still haven’t seen that elusive “affordable Model 3,” and our most cynical projections for when it will arrive are turning out to be accurate.
But Tesla is still trying to change that narrative, and the fight continued with the announcement of an upcoming $45,000 Model 3. With 260 miles of range and other impressive specs, few cars can compete with it. Here’s how the field looks.
Basics of the $45K Model 3
What Tesla CEO Elon Musk called the “mid-range Model 3” will start just above $46,000 with destination charges. In addition to its impressive range, it will feature a top speed of 125 mph and a 0-60 time of 5.6 seconds.
This model will run on rear-wheel drive, sport 18-inch aero wheels, and come with a black exterior and interior. Dual motor all-wheel-drive models start at $54,000 before destination, meaning the $49,000 model is gone.
According to Tesla, deliveries of this model will begin in early 2019. That makes it eligible for $3,750 in federal tax credits. In certain states, that cost will come down further.
We hate to play the I-told-you-so game here, but that means the Model 3 still doesn’t exist above $40,000.
Slim competition as of late 2018
There is almost no EV market in the $40,000-$50,000 market. The Chevrolet Bolt EV, which competes as far as range (238 miles) is concerned, starts at $37,495. Higher trims launch above $40,000. But it does not boast the type of flash a Tesla does.
Early in 2019, the next BMW i3 will arrive, and that is as close to a competitor for this model as we can find. The upcoming i3 will feature 153 miles of electric range and over 200 miles if you choose the range-extending gas engine. This model should cost just south of $50,000.
Maybe the biggest competitor remains a used Model S. As we argued in an August post, a used Model S 85 offers the same range (265 miles) and can be had for less than $40,000 on Tesla’s own website.
The latest bad news for the $35K Tesla
As Tesla makes its $45,000 the focus of its attention in the coming months, that pushes back the arrival date of the $35,000 Model 3. When the last postponement came, Tesla acknowledged the long-promised base model would not get delivered until early 2019.
With this latest move, the earliest arrival date becomes spring of 2019. If that pushes past June, that will mean the maximum tax credit $35,000 buyers can claim is $1,875.
In other words, the starting price will never get below $30,000, and thus the affordable Tesla will have never existed. While that isn’t a complete surprise, it’s a major disappointment for the automaker and its fans, and should be repeated frequently.
Clearly, profitability stood in the way of a “cheap” Model 3, and the company that struggled with money had not choice to abandon it. As a result, we’ll have to take all those past statements from Musk in one of three ways: wishful thinking, salesmanship, or pure fiction.