Good-bye $35,000 Model 3, which we never knew

So Tesla has revamped their product lineup again. Just two months ago I was happy to greet the $35,000 model (and have since purchased the mid-range Model 3, which was then discontinued within 48 hours after my order).

I predicted that the “plus” edition of the standard range model would be the better option, and that model proved to be more popular – 6x more popular than the cloth-seats edition of the model 3 according to Tesla. So much so that they killed the base $35,000 model this week and promised existing buyers that they would get a software locked version of the model 3 SR+.

I also predicted the base model would go away and that was correct too. I just thought it would be 12 months, not 2. You’d think this would teach Elon not to pre-announce prices but he did it again for the Model Y in March so I’m not sure he learned this lesson in time.

Logistically, the original base model would have been hell to deal with. All the additional different parts – cloth seats, manual steering wheel, manual seats, etc. – would have been a supply chain pain in the ass considering the low volumes of SR purchases. It was cheaper for the company to just offer the same SR+ car and software lock it because of the reduction of unique parts for Tesla to stock and manage inventory at their factory as well as service centers around the world.

Beyond that margins would probably have been eaten up by those different low volume parts. By keeping the same interior and just decontenting the car they can keep their margins up.

The other change, including the base autopilot (which is traffic aware cruise and auto-steer), is probably a good idea and the take rate was probably near 100%. The value proposition for buying a Tesla is not nearly as good if the car doesn’t drive itself.

But it’s remarkable to me how much the product lineup has changed in the last two months. I wouldn’t call it “flailing” but having to try a lot of things to see what sticks. If I were to buy today, I don’t think I’d be as happy with my options than I was a month ago when I ordered my blue mid-range 3.

Today I have the choice of either getting a SR+ which is decontented below what I want in a car, or I can get the long range AWD which is too expensive for my budget. I can call for the LR RWD or go into a store but that means the option won’t be around for much longer (and the price isn’t listed on the website).

I understand and agree with dropping the 35,000 base model. The new cheapest model 3 is just under $40,000, but you do get autopilot included. Dropping the LR RWD model isn’t something that I think is good for Tesla. The price jumps from 40,000 to 50,000. A 45,000 option for the RWD model would be perfect in between and the margin should be adequate to keep up the overall profits.