Tesla Motors CEO Elon Musk has always maintained that his electric car for the masses, the Tesla Model 3, would have a starting price of around $35,000 before any incentives. Many analysts were skeptical it could be done, predicting a much higher price for the 200-mile electric car.
However, Tesla Motors spokesperson Khobi Brooklyn recently confirmed to Bloomberg News that the $35,000 Tesla Model 3 price tag comes before any federal or state tax incentives. Earlier this month, Musk also said that automaker will debut the first pictures of the Model 3 at “the end of March”, according to TechInsider.
If the Tesla Model 3 does make it to market by the end of 2018, as Musk predicts, it could benefit from up to $13,500 in combined state and federal rebates, bringing the starting price as low as $21,500.
Several states, including California, Massachusetts and Tennessee, offer additional rebates for buying plug-in vehicles, generally ranging from $1,000 to $2,500. In Colorado, a generous $6,000 rebate for plug-in car purchases was recently extended through 2021 and, when combined with the $7,500 federal rebate, takes $13,500 off the MSRP of a qualifying vehicle. In the case of the Tesla Model 3, the MSRP could shrink to just $21,500, about the same price as a compact Chevy Cruze sedan.
At its current production rate, Tesla will sell its 200,000th vehicle in America sometime in mid-to-late 2018, around the same time the first Model 3 should be delivered. It’s also likely that the first Model 3 deliveries will be fully loaded (and significantly more expensive) “Signature” edition vehicles, which could cannibalize the available tax credits before lower-priced vehicles are ever delivered.
In other words, it’s unlikely that many people will be able to buy a Model 3 for the cost of a compact Chevrolet.
It’s also worth remembering that Musk promised Tesla would sell a $50,000 version of the Tesla Model S, which it very briefly did before discontinuing production after a few short months (and relying on the federal tax rebate to hit that price point). The cheapest Model S currently starts around $70,000, before any incentives.