How Much Will Tesla Model 3 Really Cost? A Lot!

Believe it or not, the Tesla Model 3 is supposed to start production on July 1. Now, even Elon Musk knows that is a highly ambitious goal andnhas allowed for some slippage in that time table, but he still maintains the company will build 50,000 to 100,000 Model 3 sedans this year.

The Model 3 is the third phase of Musk’s Master Plan. After years of making super expensive luxury electric cars, the Model 3 is supposed to be an affordable alternative — the Tesla that ordinary people can actually buy. The base price of the car has been touted as $35,000 since Tesla first announced the Model 3 more than a year ago. The allure of the car is so strong, 380,000 people around the world have ponied up $1,000 to reserve one.

Any federal or state incentives will lower the cost even further. In theory, a buyer in California could pay as little as $22,500 for one after all incentives, including those from local communities, are figured in. But is that realistic?

Tesla Model 3 prices

No, according to Model 3 reservation holder and YouTuber Shots of Jameson. He claims that a fully loaded Model 3 could retail for more than $130,000 if all the options Tesla offers on the Model S are included and cost the same as they do for the larger car. That’s unlikely, he admits. But assuming Model 3 accessories are discounted 25%, the bottom line could still pencil out to a staggering $75,000 — more than double the base price.

Model 3 premium price

Shots of Jameson speculates that the base car will have base level appointments — no fancy alloy wheels or red painted brake calipers and no upmarket interior or exterior trim bits. He also thinks the heads up display most people expect in the Model 3 will not be included in the base car.

Most people will want upgraded wheels, premium interior appointments, and the very cool glass roof. They will also want a larger battery and dual motors. Expect that mid-level car to sell for as much as $50,000. At the top end, adding full Autopilot, sunroof, premium sound, and a few other luxury bits could push the price to $75,000 or more.

For those who want a basic car, the wait will be long. Tesla says right up front it will build cars with the highest profit value first. Tesla has already sold more than 100,000 cars in the US. The federal tax credit begins to ratchet down once the company has built more than 200,000 cars. By the time all the high content cars are built, the federal tax credit for Tesla cars will have disappeared, making the odds of getting a Model 3 for under $30,000 very slim indeed.

Will any of this matter to Tesla customers? Probably not. The Model 3 is the most anticipated new car in history. Tesla will likely sell every one it can put together, at least for the first year or so. But those who thought they would be able to score a Tesla as a bargain price are apt to be disappointed. The Model 3 will cost less than a Model S or Model X, but it will be far from an entry level car. It’s nearest competitor will be the BMW 3 Series, which also starts at around $35,000 but can be optioned up to $70,000 or more by ticking all the boxes on the order form.

Shots of Jameson has no insider knowledge about Tesla or the Model 3. He is just a fan who has made some realistic assumptions. When the Model 3 configurator goes live later this year, we’ll know for sure how accurate his prognostications are.

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.