Tesla Motors Just Made the Model 3 More Awesome But Harder to Get

Tesla Model 3 (TSLA)

Tesla Motors Inc made a product announcement yesterday. It was supposed to be a “surprise” announcement about a new product but that’s debatable. In case you missed the news, Elon Musk has announced that new Tesla EVs will all have the hardware to be fully self-driving – a slight change from his previous plan of making small gradual improvements in Autopilot. In essence, buyers of the upcoming mass-market Model 3 can expect the car to have hardware that will make it fully autonomous.

About 400,000 people placed orders backed by a $1,000 deposit, when the Model 3 was nothing more than the carcass of a concept car. Now, the car is coming to the market with self-driving tech that is still elusive to rival prime luxury car brands. However, if you are planning to buy the Model 3 because the news of its self-driving upgrade has broken, you should be prepared for a very long wait.

Tesla Motors Inc (NASDAQ:TSLA) Model 3
Source: Tesla Motors Inc

New Tesla Model 3 orders won’t ship until mid-2018

Tesla Motors Inc says that the deliveries of the mass-market Model 3 will “begin late 2017” as previously planned. However, the firm updated the Model 3 order page on its website to show that new orders for the Model 3 won’t begin shipping until “mid-2018 or later”. Of course, if you are one of those 400,000 people who reserved the Model 3 in the wake of its unveiling, you can still expect your car next year.

Tesla notes that the Model 3 will go into production in mid-2017 and that deliveries will begin in late 2017 as scheduled. The new “mid-2018 or later” timeline only applies to new reservations. In a statement to CNBC, the firm says the “website update does not reflect any change in our plans… We still plan to begin Model 3 production in mid-2017, and we adjusted the delivery date on our marketing page to reflect more accurate timing for new/future reservation holders.”

It seems that Musk is making all the right moves to ensure that he doesn’t miss the Model 3 delivery timeline. About 400,000 people have supported the Model 3 with a $1,000 refundable deposit and Musk cannot afford to disappoint them. If Musk fails to meet the delivery deadlines, those people could lose heart, flock to Model 3 rivals (GM’s Chevy Bolt comes to mind), and they could start asking for a refund of their deposits.

How much would a self-driving Model 3 cost?

Tesla Motors Inc had initially refused to commit to stating if Autopilot will be standard in the Model 3 or not. He has only said that the Model 3 will be equipped with Autopilot hardware, which would take charge in emergencies for braking. Most people have taken Musk’s refusal to commit to Model 3 Autopilot to mean that you’ll need to pay for Autopilot as an optional upgrade.

A self-driving Model 3 is obviously the best deal the EV market because it offers the best value for money. Nonetheless, you should know that an Autopilot equipped Model 3 won’t come ‘cheap’. You should also note that you’ll need to pay more in auto insurance costs because Autopilot is still controversial. Autopilot has been making headlines for the wrong reasons and German regulators have asked Tesla Motors to stop marketing the tech as Autopilot.

Musk admits that people who buys his cars should be ready to face some serious red tape. In his words, “it’s not up to us, it’s up to the regulators, and we hope things don’t become balkanized and different in every state, In essence, you should be prepared to pay more for Autopilot and you should be ready to embrace the initial pushback from the traditional automobile industry and from conservative road users.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.


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