Tesla reveals Model 3 cost in its first attempt at affordable car

Tesla reveals Model 3 cost in its first attempt at affordable car

Tesla hopes to persuade buyers of its Model 3 to pay as much as $59,500 for its first attempt at an affordable car for the mass market, as it tries to find a means of pushing electric cars into the mainstream while turning a profit.

Pricing details for the car were disclosed on Friday night when the US electric carmaker officially released the first handful of the vehicles at a party at its factory on the east side of San Francisco Bay.

Elon Musk, the group’s chief executive, conceded that Tesla would be under pressure over the next six months to scale up production of the vehicle after potential customers put down refundable deposits on more than 400,000 cars. People were increasingly taking to Twitter to ask “Where is my model 3”, he said, adding “thought it’s sometimes not phrased quite as nicely as that”.

Tesla suffered slow production progress on its previous models, raising the stakes now as it attempts to make 500,000 Model 3s next year, about five times the volume of its current models. “Frankly, we’re going to be in production hell,” Mr Musk said of the six months it was likely to take to see production volume start to take off. “We’re building the cars as fast as we can.”

With 10,000 parts — a third of them coming from outside the US — any small glitch in the supply chain could cause production problems, he warned.

The base version of the Model 3 will sell for $35,000, about the average price for a new sedan in the US. However, most financial analysts estimate that Tesla will make little or no money at that price. Financial success will depend heavily on its ability to persuade customers to pay more for extra features such as a longer-range battery and the software needed for the car to park itself.

Mr Musk tweeted last year that he believed the average selling price of the Model 3 would be about $42,000, but the price list for extras published on Friday suggests Tesla is aiming higher than that. Customers will have to pay $9,000 for a larger battery, lifting the car’s range from 220 to 310 miles.

Other premium features include $5,000 for the company’s autopilot software, which enables the car to do things such as change lanes on freeways and park itself. A further $3,000 would be needed to unlock the full self-driving capabilities that Mr Musk has said would come in two years’ time.

The first 30 vehicles released on Friday all went to Tesla employees, as part of a controlled release that will see the company keep the vehicles close to home so that it can monitor them for potential problems. Bob Lutz, a former senior executive at all three of the biggest US carmakers, questioned whether handing the vehicle over to employees constituted an official release, since car companies usually maintain an internal test fleet before launching them publicly.

To simplify production and save money, Tesla has dispensed with a full instrument panel for the 3, instead mounting a tablet computer on top of a simple shelf in front of the driver.

“The cars will be increasingly autonomous, so you won’t really need to look at an instrument panel that often,” said Mr Musk. “You’ll be able to do what you want.”