The Fed Tax Credit is going away, so what’s it mean for all those reservations?

A new Model 3 is now available to order. It’s called the “Mid Range,” and it offers 260 miles per charge, a top speed of 125 mph, and a 0-to-60 mph time of 5.6 seconds, all for $45,000. Factor in the $7,500 Federal Tax Credit and $4,300 in average fuel savings, and the final price comes to $33,200, which makes it quite tempting for those looking to live the Tesla lifestyle without dropping a ton of coin. However, with the base Model 3 not hitting production until next year and the Federal Tax Credit on its way out the door, will the Mid Range be the best Tesla you can buy?

Is Tesla Screwing Over Base Trim Reservations?

Tesla Offers New Mid Range Model 3 To Tempt EV Buyers, But Base Trim Buyers Might Be Out Of Luck Exterior High Resolution
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On paper, this latest Mid Range Model 3 seems like a pretty good buy. Those who place their order now will receive their vehicle in 4 to 8 weeks, which means they’ll be on track to grab the full $7,500 Federal Tax Incentive before it’s phased out starting December 31st of this year.

However, that means those who plunked down cash to reserve a base-level Model 3 might get left in the dust.

When Tesla debuted the Model 3 in 2016, it managed to accrue an astonishing 400,000 preorders. It’s uncertain just how many of those were for the base trim level, which was priced at $35,000 before incentives. However, Tesla never actually built any base trim level Model 3’s, instead focusing on the more expensive (and more profitable) high trims. Now, Tesla says the base trim won’t hit production until 2019, and with the Federal Tax Incentive phasing out as of January 1st, customers might need to tack on a significant amount of money to their new car’s final price.

With the full Federal Tax Incentive, the $35,000 base trim Model 3 would price out at $27,500, which is extremely competitive all things considered, and arguably the driving force behind many of the 400,000 preorders submitted since April of 2016. However, that price will go up significantly without the Fed’s Incentive, as anyone who takes delivery between January 1st and June 30th of 2019 will only be eligible for $3,750 in tax incentives, half the original figure. Customers who take delivery between July 1st and December 31st of 2019 will get just $1,875, effectively representing a price increase of $5,625 for the customer.

Tesla Offers New Mid Range Model 3 To Tempt EV Buyers, But Base Trim Buyers Might Be Out Of Luck Exterior High Resolution
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Suddenly, the most-affordable Tesla isn’t looking so affordable.

And that makes this new Mid Range trim potentially the best buy of them all. Assuming fast-acting customers take delivery before the end of the year, price after the full Fed Incentive comes to $37,500. Compare that to a base trim Model 3 customer that takes delivery in the latter half of 2019, which, assuming a starting price of $35,000, calculates to $33,125 with the $1,875 reduced Tax Incentive.

What’s more, if you’re deep in the reservations list, and/or Tesla experiences additional delivery delays, it’s entirely possible you won’t get your base trim Model 3 until 2020, at which time the Federal Tax Incentive will be null and void. And that means, compared to this latest Mid Range Model 3, you just waited more than a year and saved only $2,500 for a whopping 40 fewer miles per charge (down to 220 in the base trim from the Mid Range’s 260 miles).

For those expecting to pay less than $30,000 for their base Model 3, that could come as a bit of shocker.

From a business perspective, it makes sense, as the pricier models are the real money makers. For example, the latest Performance Model 3 goes for $64,000, but justifies the huge price jump with a 0-to-60 mph time of 3.3 seconds, a top speed of 155 mph, AWD dual-motor power delivery, and 310 miles per charge.

However, when it comes to Tesla’s stated goal of bringing electric transportation to the masses, the reality is looking a bit pricier than the hype of 2016.

Further reading

Tesla Offers New Mid Range Model 3 To Tempt EV Buyers, But Base Trim Buyers Might Be Out Of Luck Exterior High Resolution
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Read our full review on the 2018 Tesla Model 3.

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