Tesla just announced that after several years of hard work, the Model 3 Standard Range is finally here. The news came in concert with a tsunami of smaller updates that will take some time to pick through.
Amidst the flood of updates that was pushed out was news that the Long Range, Rear Wheel Drive Model 3 will get an increase in range per charge from the current 310 miles (500 kilometers) to 325 miles (523 kilometers). The update also comes with a 5% boost in performance that results in a lower 0–60 mph time of just 5.0 seconds.
Tesla CEO Elon Musk said on the press call announcing the news that, “We do find ways over time, and we’ve done this many times in the past, where we’re able to improve the efficiency of the drive inverter or the motor or we get a bit more comfortable with how much energy you can extract safely from the battery pack without causing long-term damage.”
The updates will be pushed out to owners for free as part of the March 15th software update for the Model 3. The very same update is also slated to bring a host of other improvements, including the ability for the car to change lanes automatically on the freeway without confirmation when using “Navigate on Autopilot.”
Should be ~5% peak power increase with March 15 software release
— Elon Musk (@elonmusk) February 28, 2019
The approach at Tesla to its vehicles represents a sharp detour from traditional automakers in that it does not focus on short-term profits, but on building, delivering, and maintaining the best vehicles they can make with the hardware they have. This mindset translates to Tesla pushing out as many features as it can to all of its vehicles, new, used, or otherwise.
“As we get more road validation and we’re able to find optimizations and people get more comfortable widening the margins, we just update the car and make it better for free,” Musk said. “That’s been our philosophy for years.”
At the same time, Tesla continues to slash prices on its new vehicles, passing savings from one area of the company directly on to the customer. When Tesla eliminated the referral program earlier this year, it passed the savings resulting from the elimination directly on to new customers in the form of lower prices. The company is doing the same today, by passing the savings coming from eliminating its sales stores and staff on to customers of all Tesla vehicles.
The price reductions are significant. In the 8 months since we purchased our Tesla Model 3, the price has come down from $49,000 to $43,000. It feels strange, but I was happy with the price I paid when I bought it and the car has not changed one bit — aside from the improvements Tesla keeps pushing out to it. In that sense, it is a better car than it was on the day that I bought it, which is nice.
Model 3s now available
Standard Range: 220mi, $35k
Standard Range Plus: 240mi, $37k
Mid Range: 264mi, $40k
Long Range: 325mi, $43k
Long Range AWD: 310mi, $47k
Performance AWD: 310mi, $58k, 0-60 mph in 3.2s!
(prices before incentives)
— Tesla (@Tesla) March 1, 2019
On the press call announcing the Standard Range Model 3, Musk said that, “I think this is the lowest we can possibly sell this car at.” He went on to say that, “it’s excruciatingly difficult to make this car $35,000 and still be financially sustainable.”
That doesn’t mean that the prices and margins won’t improve over time, because they inevitably will. It just shows how much muscle Tesla had to put into the Model 3 to squeeze out every penny in order to get the price down to $35,000. Musk called it a “Game of Pennies,” as a play on the popular book and TV series Game of Thrones — and effort at Tesla to squeeze every last discretional penny out of every single part in the car.
Tesla has performed a minor miracle delivering the Model 3 at $35,000, but just because the prices have fallen in recent months, don’t expect the price to keep going down anytime soon. He said that he could envision a future where Tesla introduced lower cost models, but that it would be 2–3 years away at the earliest. Then again, would he really announce a lower priced Tesla on the horizon, knowing how it would force even more buyers to hold off? Time will tell, but for now, the Tesla team is likely taking a well deserved 5 or 10 minute break before getting back to achieving the impossible.
Tesla is on a mission to take down internal combustion automakers, but it’s not doing it for profit or out of a desire to gain more market share. Tesla’s desire to make the best EVs in the world, push them out of its factories by the tens of thousands per month, and get them into the hands of customers around the world is driven by a fierce desire to slash emissions stemming from transportation and help stop more catastrophic, society-threatening global heating and climate change.
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