Tesla Model 3 now available for $26,250 in Colorado, $35K before tax credits nationally

You can now get a Tesla Model 3 (great car!) for the base price — before operational savings — of just $26,250 in Colorado  

  • Teslas are fun to drive or one of the safest cars ever built.  The Tesla Model 3 landed the best safety score ever from the NHTSA (the lowest probability of injury in a crash).
  • Part of safety is in the semi-autonomous driving features. Tesla’s features are one solid step above the competition’s semi-autonomous driving features, but comparing these is too nebulous and ongoing changes come too quickly for a comparison to remain relevant for long. So, we have to cut these topics from the specs-to-specs comparison below.
  • Tesla provides over the air software updates every six weeks on average too, keeping your amazing award-winning car new.
  • Tesla’s take just a second to plug in at home, eliminate trips to gas stations, cut fuel costs in half or more, and save on maintenance and increased predictability and reliability.
  • Better drive quality includes the smooth ride, instant acceleration, the solid feel and handling, and more. The instant torque of electric cars can make gas cars feel like tractors or 1910 auto tech.

To lower prices by an average of 6%, Tesla is moving to all online sales.  The company will shut down most of its retail stores, keeping a few open in particularly busy locations as showcases and information hubs.

https://cleantechnica.com/2019/03/01/what-does-28750-to-35000-tesla-model-3-mean-for-the-us-auto-market/ by Zach Shahan (from my graduate school):

I just had to rent a Hyundai Elantra for a few days. It is like an old, super slow, rough, low-quality machine from a century ago after being used to driving electric. I can’t see why anyone would buy this car now that the base Model 3 is on the market. Yet more than 200,000 of them were sold in the US last year.  I think Tesla’s big challenge is basically still awareness. Most people are not keen to jump in and buy new tech unless someone they know has it or they serendipitously happened to experience it on their own. If you’ve experience a Camry, Accord, Elantra, and Model 3, you essentially have to choose a Model 3 — it’s approximately 3× as good for a similar price. But most people don’t know someone with a Tesla and haven’t stepped foot in one. If they’ve noticed the Model 3 on the road or in a parking lot, they probably thought it looked exotically expensive. Or the consumer just doesn’t know about charging, how easy it is, and how little there is to worry about the new tech. (Actually, they should be worrying about the old tech.)

… it makes little objective sense to choose a “luxury” gasmobile over a Model 3. With full knowledge and experience, most of those buyers should be moving to a Model 3. The Tesla wins on nearly every metric and feature…. How long does it take before one person in the average family can convince another member about to buy a new car that they can get much more value for the money with a Tesla? This is the big question.

By later this year, Tesla auto (assisted, really) steer will:

  • Recognize and respond to traffic lights and stop signs. (We’ll call this Autostopping.)
  • Automatic driving on city streets.

Because of regulatory constraints, the driver has to be alert and ready to take full control in all situations at all times. Real self-driving, where you are allowed to be drunk or sleeping, is still a few years away.

Related: Tesla Model 3 vs. 21 Competitors (Specs & Prices) — Which Car Is The Best Value For The Money?  Especially in Colorado, Tesla comes out on top!

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This article is an update to my continuing series on the the Total Cost of Ownership (TCO) of the Tesla Model 3 compared to other cars. See this article if you want more details on how I figured out the TCO for the Model 3.

Why do people buy a car? I’ve purchased or talked my parents into buying 20 cars. What was the reason for buying the cars? The most common reason was I had a car and I was concerned about its reliability and didn’t want to deal with nagging issues, so I decided to get a new or relatively new used car. The other reason was because my kids were old enough to drive and I wanted to get them a car, because it was slow for them to take the bus and I was tired of driving them to school.

The other thing that happens is a you test drive a car and it so impresses you that you tell yourself it is because your old car in unreliable that you need it — but it is really because you want that new car. That has happened to me a few times. The Nissan Leaf was that kind of purchase. I didn’t really need an electric car, but I wanted one as a boy wants a toy. The depreciation on the new Leaf and lack of a discount meant that it ended up being a poor financial decision. It would have been great if I had leased it to protect myself, but I learned so much from driving that car that it was a good purchase. I have also written about how much I loved my 1999 Honda Accord.

Of course, my Tesla Model 3 was clearly one of falling in love with the car. I reserved the car thinking the Tesla Model 3 would just be a Nissan Leaf with longer range, access to Supercharging, and better acceleration. But after I drove You You Xue’s Model 3 100 miles at 3am from Tampa to Ft. Myers a few days after Christmas 2017, I knew that this car was going to shock everyone who drove it. It was so wonderful and different than anything I had experienced before that I was shaken for days. I wondered, “What am I doing ordering a car like this?”

Once people have had this experience, they are unlikely to buy another gas car. You are in shock for several days. Everything you learned in a lifetime of driving and riding in gas cars is put into question. Three things keep you from buying one:

1. The car costs too much— That is no longer an issue for the upper middle class in the USA as of this week — see the rest of the article.

2. The car doesn’t meet your needs — you need towing, off-road capacity, seating for 7, a pickup bed, etc— That didn’t change this week, but will in the next couple of years.

3. You don’t want the “hassle” of charging— This is a real concern for those with apartments in many places and will get a lot better in a couple of years, but is a problem now. I am writing an article on how a new generation of hybrids are coming for this market, but can’t seem to get it done. Life keeps getting in the way. Maybe next week.

I’m not saying everyone who drives a car (as opposed to a truck) and lives in a house is going to buy a Model 3, but close. Of course, there will be people who don’t like the look or style of Tesla, or don’t even know the car exists. But it is tough to believe that people who have experienced the car, and realize it costs about the same as a Toyota or Honda, will buy the Toyota or Honda. It’s like if BMW or Mercedes announced they were matching Honda prices on their new cars. Many people would buy the Mercedes, even if they aren’t better cars, just because they like the Mercedes image. This is more powerful than that. Tesla has the premium image of Mercedes or BMW, but also a driving experience that is shockingly different.

What does this mean for a car industry that doesn’t make many EVs? It is at risk. Even though Tesla can’t make enough cars to replace all the cars sold each year, it can cause millions to delay their next purchase a couple years more than normal. Let’s face it, today’s gas cars are pretty reliable and can last a long time with proper maintenance. Those buying new sedans who have experienced a Tesla will likely buy the Tesla. Those who need a pickup or SUV will now realize the industry will change more in the next 5 years than it has changed in the last 50 years. So, if they need a new SUV or truck, and if they have driven or ridden in a Tesla, they will likely live with their existing vehicle for another year or two until an affordable Tesla Model Y, Tesla Pickup, or other EV comes out to meet their dramatically changed wants.

In short, Tesla ruins gas vehicles for people. This isn’t some future promise on the cover of Popular Mechanics — this is available to order on your phone now and available for delivery in as little as 2 weeks.

This Week’s Announcement

The Standard Range Model 3 changes the competitive landscape in the industry. I’ve shown my Model 3 to hundreds of people I work or socialize with. Everyone has expressed how nice the car is, and an example of what cars will be like in the future (I realize that some might not share their honest opinion with me), but when I ask people when they are ordering one, they ask me how much the car costs. I always told them it cost $56,000 but because of the tax credit and the gas savings, it is competitive with a loaded Camry or Accord selling for $35,000. I also mentioned that a $35,000 model is coming out someday that will have a little less range and an interior a little less fancy. That someday will go down in history as February 28, 2019.

People would tell me they liked the car but don’t need that much range or the fancy interior that much. They were afraid of spending over $50,000 on a car (as I was a little afraid also). I’ll show in this article that the car announced this week is going to make it VERY difficult to sell another midsized car in the US to anyone who has a garage.

In addition to lowering the entry price of the car to $35,000, Tesla also lowered the price of the Autopilot feature from $5,000 to $3,000 by taking the below 3 features away from it. This makes it more compatible with the competition’s lane-keeping software (which doesn’t usually have these 3 features).

  • Navigate on Autopilot: automatic driving from highway on-ramp to off-ramp including interchanges and overtaking slower cars.
  • Autopark: both parallel and perpendicular spaces.
  • Summon: your parked car will come find you anywhere in a parking lot. Really.

Best Selling Midsized Cars From Toyota, Honda, Kia, and Chevy

I’m updating an article I wrote 4 months ago that compared the costs to own top selling midsized cars versus the Tesla Model 3. In that article, I concluded that the costs of ownership of the available Mid Range Model 3 was competitive with a loaded Accord or Camry (cars that a few people buy) and that the $35,000 Model 3 would eventually be competitive with the Camry, Accord, Optima, and Malibu that most people buy. That happened on THURSDAY!

Updated TCO Charts For Camry, Camry Hybrid, Accord, & Accord Hybrid

Data from Edmunds.com

As you can see, although the Tesla Model 3 costs about $4,000 to $9,000 more than the cars in the table above up front, once you adjust for fuel costs and the tax credit, the Model 3 costs about the same to drive for 5 years.

If people move as aggressively to EVs as I hope, the gas cars in the above table will depreciate more quickly than Edmunds is predicting. If Tesla gets its self-driving technology approved for use in the USA in the next 5 years (Elon Musk predicted 3 years in the recent ARK interview), Tesla vehicles will have little depreciation and may appreciate as everyone who values their time buys them to be able to work on their way to work in the morning and on their commute home at night. This is much better than taking a train. You will have your own private office where you can set up multiple workstations, can have video conferences in your car, and can go door to door. It will be society changing when it happens.

So, this table above is likely the worst case. Your costs of owning the Tesla Model 3 will likely be much less.

Conclusion

Few would argue that the Tesla Model 3 isn’t extremely fun to drive or one of the safest cars ever built, but until now, many have talked about the Tesla Stretch and how many people (including me) have been willing to pay more than they have ever paid before for a car to get the unique features, like over the air updates, only available on a Tesla. Now, this amazing award-winning car is available to all new car buyers at less than the $37,149 average vehicle price as of January 2019.

My prediction is, people who are exposed to a Tesla Model 3 by family or friends will take the Tesla since it is available for less money and much lower cost of ownership than the average vehicle while offering better specs.

The rest of the car industry, which hoped Tesla couldn’t deliver the car it promised almost 3 years ago, must now figure out how to make a vehicle that people want, while the sales of their gas cars plummet from people either buying Tesla Model 3s or inspired by the car and waiting for an electric vehicle that meets their needs.

Related: Tesla Model 3 vs. 21 Competitors (Specs & Prices) — Which Car Is The Best Value For The Money?

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 I’ve been a software engineer for over 30 years, first working on EDI software and more recently developing data warehouse systems in the telecommunications and healthcare industry. Along the way, I’ve also had the chance to help start a software consulting firm and do portfolio management for several investment trusts. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments in my investment trusts. Tesla investor. Tesla referral code: https://ts.la/paul92237

78% Of Tesla’s 2018 Model 3 Sales Were Online — Musk Email Sheds Light On New Sales Strategy

78% of all Model 3 sales in 2018 were already conducted online. Further, 82% of buyers didn’t even take a test drive before buying. Added to this, awareness of the Tesla brand is as strong as it has ever been, and prospective customers are forward-looking and tech-savvy, comfortable with online purchases. Transitioning from store-based sales to online sales, along with other efficiencies, reduces vehicle costs by an average 6%. That made this a priority area for overall savings and cost reductions.  Also, of the folks considering buying a new premium car anyway, many if not most of them are already aware of Tesla.  The upcoming Tesla SUV will only boost awareness and demand.

release of the $35,000 Model 3 was the #2 news story on the BBC, even though the Tesla Model 3 won’t even begin delivery in the UK until sometime in the second half of 2019.

Tesla’s tweaked sales contract now allows customers who have not previously test driven the vehicle to return it within 7 days (or 1,000 miles) for a fast, full refund if they are not happy with the purchase. Test drives may also be allowed at service centers.