Tesla seeks affordability with new SUV, cheaper Model 3

Tesla+unveiled+a+more+affordable+version+of+its+Model+3+sedan+on+Feb.+28+as+well+as+an+SUV%2C+the+Model+Y%2C+two+weeks+later.+The+carmaker+is+trying+to+partially+branch+out+from+its+luxury+image.+%28Screenshot+%7C+tesla.com%29
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Tesla seeks affordability with new SUV, cheaper Model 3

Tesla unveiled a more affordable version of its Model 3 sedan on Feb. 28 as well as an SUV, the Model Y, two weeks later. The carmaker is trying to partially branch out from its luxury image. (Screenshot | tesla.com)

Tesla unveiled a more affordable version of its Model 3 sedan on Feb. 28 as well as an SUV, the Model Y, two weeks later. The carmaker is trying to partially branch out from its luxury image. (Screenshot | tesla.com)

Tesla unveiled a more affordable version of its Model 3 sedan on Feb. 28 as well as an SUV, the Model Y, two weeks later. The carmaker is trying to partially branch out from its luxury image. (Screenshot | tesla.com)

Tesla unveiled a more affordable version of its Model 3 sedan on Feb. 28 as well as an SUV, the Model Y, two weeks later. The carmaker is trying to partially branch out from its luxury image. (Screenshot | tesla.com)

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Tesla CEO Elon Musk is well-known for his company’s eye-grabbing electric cars, most of which are notorious for their hefty price tags. And at a March 14 event in Hawthorne, California, Tesla unveiled a brand-new model aimed at a more affordable market.

The Model Y, an all-electric dual-motor SUV that Musk said at the event “would ride like a sports car,” premiered at a starting price of $39,000. It’s expected to go into production in late 2020. In addition, a more affordable version of the company’s flagship Model 3 debuted two weeks earlier.

That car, which has a starting price of $35,000, is in the same price range as many familiar brands of sedans, such as the Nissan Sentra, Hyundai Sonata, Honda Accord, Toyota Corolla, Ford Fusion and Honda Civic. It’s all part of Tesla’s bid to court more mainstream consumers, broadening the image of what remains in the minds of many a decidedly luxury brand.

“The average monthly car payment in the U.S. is around $530/month, which plants the new Model 3 configuration, that goes for $485/month before the tax credit and fuel savings, firmly in affordable territory,” said Will Thompson, an associate with  Minneapolis-based venture capital firm Loup Ventures. “The new price point opens the doors to a new league of potential buyers and sets the precedent for cost and quality of EVs going forward.”

That’s a far cry from the eye-watering $250,000 price tag on the Founders Series Tesla Roadster, which is expected to be produced in 2020.

But even though the Model 3’s new base price may be an attempt to appeal to the masses, Tesla announced on Feb. 28 that the company would likely not be profitable in its first fiscal quarter.

And in an April 3 press release, while noting that it still had “sufficient cash on hand,” Tesla admitted its net Q1 income would be “negatively impacted” due to “lower than expected delivery volumes and several pricing adjustments.”

The company has faced some issues with production delays as well as allegations of worker mistreatment, and Musk has stated in several interviews that the Model 3 will cost more money to make than it is priced. In addition to keeping investors happy, the company faces challenges ahead in satisfying its customer base and maintaining a balance between exclusivity and affordability.

For DePaul students in the market to buy a vehicle, there is now have another megacorp to add to their list of economical brands.

“When I think of Tesla, I think of the words futuristic and progressive,” sophomore Samuel Heringhaus said. “I would choose Tesla over another brand because I feel like they provide the best driving experience while also being electric. Additionally, their physical aesthetic is incomparable to any other brand.”

And DePaul junior Sam Egar believes that Tesla isn’t slowing down anytime soon.

“I think Tesla is going to have to find the balance between luxury and affordability while diluting their brand,” junior Sam Egar said. “However, the precedents they have set in so many spheres of influence in our society will remain growing and thriving for decades.”