Tesla confirmed Tuesday that it would be raising the price of the $35,000 Model 3 Standard Range by $400, putting an end, at least for now, to the company's push to sell a long-promised $35,000 electric vehicle.
Tesla's $35,000 Model 3 Proves Elusive
In the end, Tesla wasn't as ready to produce the $35,000 model 3 as the company had hoped, confirming Tuesday that the company would have to raise the price on the vehicle by $400.
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An additional $400 isn't all that much, realistically, when a consumer is already dropping $35,000 on a new car, but $35,000 is a goal that Tesla has set for itself and after slower than anticipated Model 3 deliveries in the first quarter led to a $702 million loss and a nearly $2 billion burn-through of cash on hand, the company appears to be unprepared to financially shoulder the lower margin on the lower price point.
According to CNN, the additional $400 per car would give the company an extra $20 million in revenue next quarter if the same number of Model 3s are delivered as in the first quarter of the year. This is in addition to its recent announcement that it would be seeking $2 billion in additional capital investment this year, shows that Tesla is looking to rebuild some of its financial asset base as it looks to begin Model Y production.
"At this point, sadly, every dollar counts," said Karl Brauer, an executive publisher at Cox Automotive, part of Cox Enterprises, which also publishes the authoritative Kelley Blue Book auto pricing guide.