Leaked Documents Reveal How Tesla Priced its Entry-Level Model 3

Everything we know so far about the Model 3.

via Getty Images

Tesla Model 3 rumors are on the rise again after some documents showed up on Model3OwnersClub.com earlier this week. The documents appear to be training slides, remark some users, which go into detail comparing the Model 3 to the Model S. It appears that the Model S will sustain Tesla's premium line, as the Model 3 makes some cuts in the luxury department, as well as performance.

After an independent firm recently assessed that Tesla would take a loss on each Model 3 sold under $41,000, it became questionable if Tesla's $35,000 entry price for the Model 3 would be sustainable. Tesla has appeared to move towards a more economy car feel for the Model 3, which was expected to be the case since the vehicle was announced to be a mass-production long range EV for the public.

Performance and range are the first to take a hit. The Model S P100D variant is known for its Ludicrous Mode that propels the vehicle from 0-60 in only 2.3 seconds, however, its younger sibling will take slightly longer to reach the same speed at 5.6 seconds. The Model 3's range of 215 miles is 14% shorter than the base Model S (249 miles), and 36% less than the P100D's range of 335 miles. This might not be an issue for most drivers making a shorter urban commute, however given that a cross-country road trip in an higher range P85 could potentially take 40% longer, one might question taking a long trip in their Model 3.

Luxury features are also cut back to reserve costs. One of the most notable features about hopping in a Tesla are the two large displays peering back at you. The Model 3 won't have quite the same effect, as one of those are missing. The gauge cluster is no longer a display, notes the document, which likely indicates that the center touchscreen, which has had two inches shaved off of the Model S' size, will be the central reporting region of the vehicle. Additionally, the Model 3 will have none of the premium features available in the Model S, such as the aluminum body, air suspension, glass roof, larger wheels, and more.

It's the little things that matter to most people, right? Some amenities were also cut short in order to preserve the $35,000 price tag. Lifetime supercharging, which was believed to be going away, remains for the Model S. The Model 3, however, is pay-per-use, presumably after the free 400 kWh credit issued each year. The number of configurations were also reported to be decreased. Trunk space has decreased, and two less passengers can fit into the vehicle. While buying the Model S, one could choose over 1,500 different configurations; the Model 3 allows for less than 100.

Tesla is sending a clear message to prospective Model 3 owners that the Model S is still the king of their line. While eclipsing the price, the Model S offers a much more premium and refined feel than the Model 3 - and that's okay. The Model 3 is being marketed as a mass-production consumer vehicle, not a luxury vehicle. Its purpose is to introduce a long-range EV into a market of boring beige-mobiles and still be easy on the wallet.