Automakers sell multiple variants of a Model, because it pushes the average selling price higher while also giving enough room to cover customers across multiple price points. Tesla Model 3 buyers, more than 70%, have booked All-Wheel-Drive Long Range Battery version, Tesla’s VIN registration data shows.
Since the time Tesla started registering AWD VINs, for every three $49,000 RWD Model 3, Tesla has registered at least seven $54,000 AWD Model 3.
Customers said in 2017 that they prefer All-Wheel-Drive over Rear-Wheel-Drive
The customer preference of higher priced AWD Tesla Model 3 over the RWD may come as a surprise to many, but consumers have been very clear from the start about their preference.
Bloomberg’s Model 3 Tracker manager, Paul Carter wrote, “As it stands now, 29% are wanting Rear Wheel Drive. From the year end report, it stood at approximately 25%. The large majority of Model 3 reservation holders want the dual motor configuration and willing to wait for it.”
He wrote this in Teslarati forums in April 2017, long before Tesla’s first Model 3 was delivered. Customer preference has always been skewed towards AWD.
Customers are buying All-Wheel-Drive Model 3: 70%
Surveys are surveys after all. There is always a margin for error. But if you look at Tesla’s Model 3 VIN registrations in the last couple of months you will realize that Bloomberg nailed it’s survey. Nearly 72% of VIN registrations has been for Dual Motor AWD Model 3 since Tesla started registering them in the last week of June.
“To date, 39,581 dual motor VINs have been registered w/ NHTSA (excl. test batches). This represents ~72% of all VINs registered (54,726) since AWD registrations began on 6/28.”,
– Model3VINs
Model 3 Margins on All-Wheel-Over Drive
Now, what we do not know is, how many of these AWD customers have opted for Enhanced Auto Pilot and paid the additional $5,000 and how many of them paid $3,000 for Full Self-Driving Capability. When both these options are added the Long Range AWD Model 3 price hits $62,000, very close to the Model 3 Performance Version.
According to this article by Futurism published on October, 2017, “some 77 percent of owners bought the Enhanced Autopilot package, while around 40 percent opted for the Fully Self-Driving Capability.”
Once again, we do not know how many Model 3 customers were ready to push the price to $62,000 for Model 3. But even if half the customers who bought AWD paid for both Enhanced Auto Pilot and Full Self Driving Capability that will push Tesla Mid Variant’s average selling price to $58,000.
According to two tear down reports from either side of Atlantic Ocean, the $49,000 RWD version is sitting on a healthy gross margin of 30%. Margins should only get better for AWD and get even better when customers pay for Enhanced Auto Pilot and Full Self Driving Capability.
If more than 70% of customers are buying the AWD, then it just makes Tesla’s job easier to shore up its bottom line for the third quarter of fiscal 2018. Tesla buyer preference may have already secured the company’s profitability.
