Why I’m Ditching My Tesla Model 3 Reservation
It’s been a long, strange trip since Tesla Model 3 made its first appearance on March 31, 2016. That day, I felt skeptical but excited about the possibility of owning a “junior Model S” for $35,000. I had driven and reviewed electric cars for years, but nothing compared to a Tesla. So I stood in line and put down $1,000 for a reservation.
If you asked when I expected to realistically get my Model 3, I’d have said early 2018. But Tesla CEO Elon Musk flipped the script when he announced his factory would crank out 20,000 per month by December 2017. Another 500,000 would come in 2018. Heck, with my early reservation, I started thinking I’d see a Model 3 by Christmas.
Well, things changed again — a bit drastically — at the start of November. After announcing the company was way behind its Model 3 goals, Wall Street investors became upset at Tesla. Stock prices dropped accordingly. However, I’m not a Wall Street guy; I don’t care about stocks. I’m someone who gives a damn about the environment but wants a cool car, too.
Then I got the Tesla email (right after the company’s fateful earnings call) saying I could expect my Model 3 by “early 2018.” In Musk-speak, that means sometime next summer. But it got worse: It turns out I might not have a shot at the $7,500 tax credit, either, while Tesla’s high-end customers will. More and more, the entire vehicle launch is sounding like a publicity stunt. Here’s why I’m ditching my Tesla Model 3 reservation.
1. Tesla’s game is tiresome
You don’t need to follow Tesla too closely to grow tired of the routine. It goes something like this: Over-promise; under-deliver; compensate on the margins; repeat. As I already noted, I’d have been happy receiving my Model 3 in February or March of ’18. That seems reasonable. But the goal posts moved again. Unless I choose the long-range model or spend over $60,000, it will be closer to summer. It’s the same Tesla game, only less amusing.
Next: Who knows when the Model 3 will actually be available?
2. There is no Model 3 timetable
Why would anyone believe the timetable Musk and other Tesla officials give for Model 3? Of course there are going to be “bottlenecks” and other issues in such a massive undertaking. No one expects otherwise. So we’d rather not start planning for “early 2018” when a Gigafactory or supplier issue will turn that into “late 2018.” If you’ve caught onto the routine, that would mean some time in 2019. By then, no one knows if Tesla tax credits will still be on the table.
Next: Reliability could be a big issue.
3. Reliability could be terrible
If you check the latest Consumer Reports ratings, you’ll notice Tesla Model X received the worst reliability rating of any vehicle on the U.S. market. Now, we’ve acknowledged the glitches and finish issues of the early models, but Model X is now in its third year of production, folks. When will Tesla finally get it right? Even considering Model 3’s a simpler design, no one can be sure the newest Tesla won’t have the same growing pains its predecessors did.
Next: The real price tag might be more expensive than you think.
4. Kiss the $7,500 goodbye?
Remember the $35,000 Tesla that became a $27,500 car after consumers of the base model claimed the federal tax credit? Well, that car may never get the chance to exist. According to the timeline offered, only buyers of long-range models ($49,000) with significant options will get their vehicles by the first quarter of 2018. By then, it’s quite likely Tesla will have exceeded its 200,000 credits, beginning the countdown to a lesser ($3,750) reduction. This car will then be out of my price range, and many other consumers will no longer be able to afford it, either.
Next: Here’s what the tax credit schedule looks like.
5. Breaking down the tax credit schedule
So what are the likely scenarios for people with Model 3 reservations actually getting access to the $7,500 credit? CleanTechnica did some serious number-crunching in July to project three scenarios. In one scenario that assumes just 30,000 Model 3s produced by March 2018, it would leave just the second quarter (ending in June) for Tesla buyers to get the full credit. After that, it would cut in half for the rest of the year before hitting $1,750.
Other factors will contribute to the availability of the credit as well. For example, if Model 3 buyers decide they don’t want to wait, they could get a Model S and take that credit. So even if Model 3 deliveries don’t speed up the end of Tesla’s credits, Model S and X will. Then there’s the GOP tax plan about to run through Congress. If it passes in its current form, the EV tax credit would end altogether. That’s why Tesla stock dipped again on Nov. 2.
Next: Does Tesla only care about the 1%?
6. Tesla’s accommodation for the 1%
To be fair, Tesla was clear it would produce the most expensive version of Model 3 first to finance the production of the rest. (The automaker’s financial struggles are well documented.) However, Elon Musk also said Model 3 would cost $35,000 before incentives, which is why 400,000 people signed up for a reservation along with me. By allowing the wealthiest buyers first dibs, Tesla is effectively giving away free options.
If you want to upgrade to the 310-mile version, taxpayers will finance it with a $7,500 credit. For those who want to add autonomous driving features, go ahead, they’re free. Frankly, this is not a good look for a company already pegged as serving the richest Americans. A better plan would have been to charge $5,000 for the pre-order of expensive models. Then, $1,000 reservation holders would be clear about where they stand (i.e., in the back of the line).
Next: There are more fish in the sea.
7. The used EV market offers much better deals
I’m one of the many consumers who consider new EVs to be too expensive for what they deliver. However, the used electric car market has changed since the Model 3 first appeared on stage in March 2016. At the close of 2017, loaded Nissan Leafs with 107 miles of range are selling for about $16,000. That’s a great deal, and more models with decent range will enter the market soon.
In fact, when iSeeCars.com looked at the hottest selling used vehicles in 2017, EVs were at the top of the list. A highly reliable Nissan Leaf from 2016 has become a much better deal than a questionable Tesla that may or may not arrive in the next year. I’m trying to be practical here. I’d love a Model 3 above all else, but it doesn’t seem like I can get one anymore.
Next: Too much risk
8. All risk, no clear reward
When I buy my first brand-new car — Model 3 would have been it — I’d like to see more positive outcomes on the horizon. I don’t want to worry about how much it may or may not cost, whether it will have glitches, and what month/year I might get behind the wheel. Like everyone else, I have enough to worry about in my life, and I don’t need a car adding stress to my situation.
Tesla’s mission is genuinely admirable, and I still support this company and hope for its success. After all, sustainable travel will likely decide whether our planet remains habitable. But buying a Model 3, the only one I could afford, seems like too much risk with no clear reward. To those staying on board, I don’t blame you. I wish you luck and hope you take me along for a ride once you get yours.
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