Tesla Inc. kept the starting price for a Model 3 at $35,000 when Chief Executive Elon Musk officially handed out the first of the new cars Friday, but customers who want longer-range batteries and autonomous features will pay more.
Chief Executive Elon Musk detailed the pricing for the first time Friday night at an event in Fremont, Calif., marking the delivery of the first Model 3 units to their employee owners. Musk describes the Model 3 as his attempt to draw the mass market to Tesla’s electric cars with a more achievable starting price, after Tesla’s two previous models, the Model S and Model X, addressed the luxury market.
had stated that the aim was a starting price of $35,000, and it achieved that goal by introducing the Model 3 at that base price for a standard edition expected to travel 220 miles on a full charge. Extras include a long-range battery meant to go 310 miles that will push the car’s initial price to $44,000 and increase the top speed, and autonomous “driverless” features.
Tesla has begun offering semiautonomous hardware and software it calls Autopilot in its vehicles, with the help of an Nvidia Corp.
supercomputer. The features currently offered on Tesla cars are mostly to assist drivers on the highway, but Musk spoke of a time in the future in which Tesla drivers will sleep or watch movies while the vehicle does all the work.
“Every Tesla sold right now has the hardware for full autonomy,” Musk said.
But the use of the self-driving hardware is one of the extras that will add on to the bill for a Model 3. The Enhanced Autopilot package with the Model 3 costs $5,000, as it now does for Tesla’s other cars, and full autonomy will eventually cost another $3,000, when (or if) that ability is viable and deemed legal.
The Model 3 also has upgrades for features, paint and tires that can push the final price tag for a Model 3 toward $60,000 before taxes and other fees, according to the features listed on Tesla’s website. That is still cheaper than the base price of the Model S and Model X.
Tesla announced soon after reservations opened that 373,000 people had put down $1,000 deposits to buy one, and Musk told reporters Friday that reservations now stood at more than 500,000, according to The Wall Street Journal.
Musk has promised to ramp up production at a phenomenal rate from what the company has previously accomplished with the Model S and Model X. He reiterated at Friday’s event that he expects to build the cars at a rate of 5,000 a week this year, ramping up to 10,000 a week by the end of next year, and said customers who reserve the cars now would likely receive them late next year.
— Tesla (@TeslaMotors) July 29, 2017
At the event, which was streamed live online, Musk told a crowd that included many employees that the next six months would be tough as they seek to meet his targets.
“Welcome to production hell,” he said, while thanking employees for their work so far.
Musk is also looking to ramp up production of batteries for the Model 3 at Tesla’s young Gigafactory in Reno, Nevada. Employees were crowded outside that facility as well to celebrate Friday night, according to a live shot Musk introduced at the event.
The newly built Gigafactory’s ability to produce batteries for the Model 3 at scale is part of Musk’s plan to keep production costs on the new cars low. The executive, who is also chief executive of the SpaceX rocket startup, believes new advances in automation will allow for greater production at his factories, and the Model 3 will be a big test for the company’s manufacturing ambitions.
Tesla stock has driven higher in the past few months as the Model 3 has ramped to production, gaining 56.8% so far in 2017 to easily outpace the S&P 500 index, which has increased 10.4% this year. The company is scheduled to release quarterly earnings on Aug. 2, when Musk is expected to update his forecast for the rest of the year to include Model 3 deliveries.