Tesla Starts Delivering Model 3 Performance Version: The Most Important Car in the Company’s History

Tesla started delivering Model 3 Performance version to customers in North America. At its launch, the P3D carried a price tag of $78,000, but Tesla decided to unbundle some of the options and dropped the starting price to $64,000.

Why Model 3 Performance Version is “The Most Important Car” in Tesla’s  history?

To answer that question I may have to ask another question. Why did Tesla Shorts go after Dan Neil for reviewing Model 3, when they were deafeningly silent when Consumer Reports issued a “We Recommend Model 3” rating?

Dan Neil, the only auto critic ever to win a Pulitzer quit Twitter after coming under a barrage of criticism from Tesla Shorts.  Tesla shorts went after Dan, because Consumers reports reviewed the long range Model 3, while Dan Neil reviewed Model 3 Performance Version.

Now that we have confirmation from the shorts that some thing is so unique about Model 3 Performance Version – lets look at the details.

BMW and Mercedes-Benz have for years sold their performance models – BMW M Series and Mercedes-Benz AMG. Luxury brands sell performance models because its a high margin-low volume game.

Simply put, it makes no sense to not launch a performance model for what it offers the brand.

A profitable and highly desirable product.

Tesla is known for capturing customers at multiple price points within a segment. In 2015, Tesla took the pole position in the US luxury segment. But the company didn’t take away customers from higher priced Mercedes Benz S Class but also took away customers from lower priced BMW 6 series, Audi A7 and so on.

Mercedes-Benz S Class starts at $89,900 in United States, Model S starts at $77,000. BMW 6 series and Audi A7 start at $70,300 and $69,700.

Tesla’s impact on the US luxury segment was across all price points, as most of the car makers who took the hit after Model S was launched never recovered.

Randy Carlson, http://solrio.org/

This is where Dan Neil’s review of Model 3 Performance version makes all the difference. He test drove the P3D and called it a “A Thrilling, Modern Marvel”.

When a Pulitzer winner for criticism says “This thing is magnificent, a little rainbow-farting space ship, so obviously representative of the next step in the history of autos,” after test driving Model 3 Performance version, will you take a look at if you are in the market for a $60,000 car? What will you do if you are ready to spend $80,000?

And if you do take a look at it, why would you turn down a car owned by a limited few in North America, after one of the best critics in the auto industry says It’s magnificent, a spaceship, so obviously representative of the next step in the history of automobiles.’  

A bit difficult isn’t it.

The Mid-Size luxury passenger car segment reported sales of 296,117 units in 2017, an average of 5,694 units per week.

If Tesla captures 25% of the segment with its Performance Model 3, it’s most profitable version, it will not only help Tesla’s bottom line but will also end up helping Tesla push Model 3 (lower versions) price point lower and lower.

That’s why I call P3D the most important car in Tesla’s history. It can change the course of Tesla’s future.

One thousand cars at a time.