Tesla CEO Elon Musk posted a picture at the weekend of what appears to be the first “saleable” Model 3 sedan to roll off the Fremont, California assembly line, a critical step in Tesla’s push to become a truly mainstream manufacturer.
But the company appears to have pushed back on its promise to start taking official orders for the new Model 3 on Friday and still has not given a solid sense of pricing for the compact battery-electric vehicle. A visit to the Tesla website only reveals the same information that has been up there for some time, among other things noting a “starting price” of $35,000.
Tesla has a lot riding on the Model 3 launch. Though there are plenty of skeptics, Musk has outlined a plan that would take the company’s production to 500,000 vehicles in 2018 — a sixfold increase from 2016 — and Model 3 would account for about 80 percent of that total.
This first Model 3 already has a home, apparently. It was due to go to Tesla board member Ira Ehrenpreis, the first to put down a reservation and deposit. But he has reportedly given the rights to the first car to Musk as a birthday present. He turned 46 on June 28.
As for retail customers, it’s unclear what a typically equipped Model 3 will go for. The company is expected to offer some options, including its semi-autonomous Autopilot technology. It is uncertain whether buyers will get the option to upgrade to a battery pack offering more than the base 215-mile range, as is the case with the current Models S and X. Tesla has only confirmed it will offer 18- and 19-inch wheel options.
“Initially, the Model 3 configurator is going to be like 'What color do you want? And what size wheel do you want?' That’s basically going to be the configurator,” said Musk in a tweet.
The configurator will also show future options, such as a dual-motor version of the Model 3, similar to such existing products as the larger Model S P100d. That, according to Musk, is due “late 2017 or early 2018.”
Tesla previously said it would charge Model 3 customers to use the company’s high-speed Supercharger network. The feature is built into the price of Tesla’s more expensive products.
Barely a month ago, Tesla's stock zoomed to record levels following Musk’s announcement that the first Model 3 would be ready in July. But things haven’t gone so well since then. Stock plunged by nearly 20 percent last week, briefly entering “bear” territory, before settling in. Shares are still off more than $70 from the record $386.99 high set in June.
Any number of issues have sent investors scurrying:
- Relatively weak second-quarter sales, which were up 53 percent year-over-year but down 12 percent from first quarter numbers
- Demand in California, Tesla’s top market, was especially weak
- The Model S sedan fared poorly in a key crash test and failed to earn the coveted Insurance Institute for Highway Safety “Top Safety Pick+” rating
- Key analysts have amped up warnings about Tesla stock, including David Tamberrino of Goldman Sachs, who sees a long-term price of between just $170 and $180 a share
- Volvo announced plans to electrify its entire line-up, emphasizing that most manufacturers are migrating to hybrid, plug-in and pure battery-electric power, a more direct challenge to Tesla.
Shortly after the Model 3 was first unveiled on March 31, 2016, Tesla indicated it had received more than 300,000 advance orders. The company has not updated that figure, though analysts have estimated it is currently somewhere between 400,000 and 500,000. For his part, Musk indicated Tesla has about 18 months of back orders based on its current production ramp-up schedule. That means deliveries wouldn’t be completed until sometime in 2019, even if it received no additional orders — but Tesla says it has continued to book more early reservations.
The real test will come this month when the order configurator goes into operation and we get to see if those reservations actually will translate into paid sales.