Tesla continues its Model 3 Pricing Tap Dance

Tesla Model 3 deliveries special event at Tesla Fremont factory

Tesla took less than a week to update the price of its cheapest Model 3 version, the rear wheel drive model with a mid-range battery pack that can take you up to 260 miles. Tesla increased the base price from $45,000 to $46,000.

This is not the first time Tesla updated Model 3 pricing. It’s happening so frequently that Model 3 is well on its way to make it to the record books as the car with most price revisions. The frequent price updates clearly show that Tesla is continuously adjusting its price vs demand vs production capacity equation.

Since the time Tesla rolled out its first Model 3 in July 2017, the electric car maker has been selling Model 3 powered by a long-range battery pack that offers 310 miles range.

The rear wheel drive model with a long-range battery pack carried a base price of $49,000. That changed when Tesla launched its latest model, a rear wheel drive Model 3 powered by a “mid-range” battery pack that offers 260 miles range.

It must be noted that the dual motor all-wheel drive version was a huge hit. The higher priced Dual Motor versions outsold the cheaper Rear Wheel Drive model by a considerable margin, a trend that has continued to this day from the time Tesla began registering AWD in June 2018.

Tesla management would have been pleased to sell more of its higher-priced dual motor versions, but it also exerted significant pressure on Tesla’s production unit while making it explicitly clear that Tesla’s Model 3 price positioning needs a big re-think.

The Result: Tesla pulled back the range – reducing it from 310 miles to 260 miles, launched the new mid-range Model 3 version by dragging the starting price down to $45,000 from $49,000. And now they have increased it to $46,000.

Is Tesla increasing the price because the company received more orders for the “mid-range” Model 3 version than anticipated? Please let us know in the comments.