Won’t happen before 2019 though

We recently learned that Tesla had to refund almost a quarter of all the 400,000 reservations made for the Model 3 due to production delays, but Elon Musk is already looking into the future and says that pricing for the sedan could drop once production increases. The CEO also said that Tesla might start offering Model 3 leases in "six to nine months."

When asked on Twitter whether the Model 3 could cost as low as $28,000 with a production volume of 10,000 units per week, Musk replied by saying “Definitely.” A starting price of $28,000 is a solid reduction from the current $35,000 before incentives, but the "10,000 units per week" part is what will keep this from happening anytime soon.

You see, Tesla is currently rolling off a bit more than 2,000 Model 3s per week, less than half of what Musk wanted to produce by the end of 2017. The company also planned to produce 5,000 examples per week by the end of Q2 2018, but it probably won’t happen, so it remains to be seen if this goal can be achieved by the end of the year.

While a $28,000 Model 3 sounds exciting for the average Joe — it could cost just a bit more than $20,000 after government incentives are applied — it definitely won’t happen before 2019. And that’s an optimistic scenario anyway, as Tesla is still struggling to streamline production of the electric sedan.

As far as a lease program goes, Musk said that it might become available in six to nine months from now. So not sooner than December 2018, but it’s not likely to happen before 2019. Currently, the only way to buy a Tesla Model 3 is to have a reservation and then buy the car outright or with a loan. The reason why a lease program isn’t yet available, according to Elon Musk, is that it would require Tesla to put up the money upfront, which negatively affects the company’s cash flow.

Musk also explains that "loan financing is a better deal anyway, as bank conservatism for new car models is very conservative about residual value." But Tesla definitely needs a lease program, which is already available for EVs like the Chevy Bolt EV, Hyundai Ioniq Electric, and the Nissan Leaf.

Further Reading

2018 Tesla Model 3 Exterior High Resolution
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Read our full review on the 2018 Tesla Model 3.

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