Is the low price just a publicity stunt? Tesla may never make a $35,000 Model 3

Leifeng.com: What is Musk up to?

Two years ago, Elon Musk opened his cash box and began accepting deposits for Model 3 ($1,000), and this very affordable price brought him more than 400,000 orders. However, up to now, the outside world still cannot see through the strategy of the "Silicon Valley Iron Man".

After solving the production bottleneck, does Tesla really dare to sell Model 3 at this price without limit? Will this car, which claims to be designed for the mass market, really not become a burden that drains Musk's wallet?

In order to get out of "production hell" as soon as possible, Musk has been living in Tesla's Fremont factory for some time. After the situation improved slightly, Musk started new marketing on Twitter, the main propaganda platform.

This time he brought a "magic modified version" of the high-performance Tesla Model 3, which has greatly improved its acceleration performance and battery life, but the price has also risen to US$78,000, exceeding the price of the entry-level Model S.

Another point worth pointing out is that although Model 3 can deliver several thousand units every month, these models are all equipped with the optional long-range version, which costs $50,000. The $35,000 basic version that users are most concerned about may not be available until the end of this year, or after Tesla successfully achieves its goal of producing 5,000 units per week.

Not long ago, Musk tweeted: "When it comes to production, you must first achieve your target revenue, then you can sort out the entire process to achieve your target cost. If you sell the basic version of Model 3 now, Tesla will only continue to lose money and go to extinction. If you want to get the $35,000 version of Model 3, I'm afraid you have to wait 3 to 6 months after we reach a weekly production capacity of 5,000 units."

From Tesla's perspective, Musk's "truth" is correct, after all, it is already a company with a mountain of debt and quarterly losses. But from an outsider's perspective, Tesla's future is more difficult to predict, because it is not easy to transform from a niche manufacturer selling $100,000 luxury cars to a large-scale manufacturer.

If God blesses, perhaps users will be able to get their entry-level Model 3 by the end of this year, but if something unexpected happens again, I'm afraid this "beggar version" model will only remain in the brochure.

"I don't know if the $35,000 Model 3 will ever come off the assembly line," said Rebecca Lindland, an analyst at Kelley Blue Book. Lindland canceled her order this year because the Model 3 delivery date was repeatedly delayed. "I feel like Tesla may eventually announce that it will no longer offer this model, and give a reason why users are not interested in it."

Don't be surprised, Musk has done this before. When the Model S was launched in 2013, Tesla unexpectedly listed a base version on its official website for $49,900 (original price $57,400, with a $7,500 federal tax credit). At the time, Musk did a lot to promote the $50,000 price tag, saying it was part of his "secret plan." However, in the end, this bombshell didn't go off, and Tesla actually said that few people were willing to buy the Model S with this configuration.

In addition to not being able to buy the basic version of Model 3, Consumer Reports also poured cold water on this popular car. Consumer Reports said that it cannot recommend this electric car at this stage because its braking ability is poor and the central control is too simple and complicated to use.

Consumer Reports noted that "the Model 3's braking distances are woefully poor compared to its contemporaries, taking longer to stop than a full-size Ford F-150 pickup truck."

In response, Tesla said its actual test data was much better than that of Consumer Reports, but Musk still promised to solve this problem through software upgrades.

Cowen & Co analyst Jeffrey Osborne pointed out that focusing on high-end models can indeed enable Tesla to achieve its predetermined profit targets and meet the needs of some consumers.

"It's not surprising that they're bringing out a $70,000 'mass' car, and there are certainly consumers willing to pay for the extra features. However, this will also harvest some Model S users," Osborne explained.

This month, Tesla announced that it still had 450,000 Model 3 orders, but Musk did not disclose the number of cancellations versus new orders. As for how many people chose the basic version, Tesla did not say a word.

"In the short term, if you can get a Model 3 for $35,000, I'm afraid Tesla will go bankrupt," Osborne said. "They have to eliminate all the manufacturing problems and get rid of these problems."

Osborne does not doubt the patience of Mad Men fans. He said: "If you have waited two years, you probably won't mind waiting another six months."