Musk Trying To Upsell Model 3 Reservation Holders To The Model S

Yesterday, we were blessed with an always appreciated and unusually long Tweetstorm by Tesla CEO Elon Musk. He shared a few new details about the Model 3 and its rollout, but I feel like the main point that transpired from the Tweetstorm is that Musk is trying to down-sell the Model 3 and push the Model S instead.

It’s something that he already said Tesla is attempting to do when potential customers show interest in the Model 3 for which the company already has a backlog of ~400,000 reservations – he called it “anti-selling the Model 3′ in a recent conference call with analysts, but it was never clearer than in the series of tweets he sent out yesterday.

He started off by making sure that people understand that the Model 3 is not the “next Tesla” as in a “next generation of the Model S”, but a new model positioned below the Model S.
 

mre30 - 3/27/2017 10:27:37 AM

+1 Boost

While I am sure that we all can't wait to see the Model 3 in the flesh - I will be very curious about how it compares to the Model S.

Why?

Most of the Tesla customers are high-demo, "premium" customers who love their Model S (and X?) for the vehicles' prestige and performance. While the interiors are not really luxurious, the vehicle seems 'premium'.

Will the Model 3 be 'premium' as well? Or will it be a Hyundai Elantra experience versus an S Class experience?

Very curious!

SanJoseDriver - 4/1/2017 10:14:55 PM

+1 Boost

It will still be "premium" since it will have to compete with the A4 and 3-series, but it won't be just a smaller Model S. Tons of cuts were made including a second screen, auto-door handles, adjustable air vents, etc. The leather seats should be similar but there will be fewer interior trim options. They didn't announce it yet, but I think the UI might be missing a few options as well like the web browser and camera panel.

It should still be a solid car, but there will be compromises to get the base price to $35k.

Vette71 - 3/27/2017 11:05:08 AM

0 Boost

"A bird in hand is worth two in the bush". Smart marketing on his part to convert as many of those "reservations" into current deliveries as he can rather than risk them being cancelled or going away to some other brand be it EV, PHEV or whatever. Get the cash now.

TheSteve - 3/27/2017 12:15:40 PM

0 Boost

Like Vette71 said, a sale now is better than a deposit now and a *potential* sale in a year or two... or three. And if all you have to offer to a $35,000 Model 3 depositor is your current lineup of a Model S (~$70,000) or Model X (~$87,000), then yeah, that's an attempted upsell.

I'd like to add that it's usually very difficult to get someone who's looking at a specific car to spend double their budget, or close to triple, on an upsell. That's a totally different market.

vdiv - 3/27/2017 1:12:43 PM

-2 Boost

Yeah, not sure why this is news, the Models S/X 60/D were introduced just for that purpose. Also if money is a bit tight why not go for a CPO car?

Tesla is a victim of its own success and has to work at moderating expectations.

MDarringer - 3/27/2017 7:58:20 PM

+2 Boost

Bait and switch is illegal.

TomM - 3/28/2017 7:13:07 AM

+1 Boost

No Matt - this is NOT Bait and Switch. Bait and Switch normally refers to advertising something at a low price but to bring them in to switch them to a higher priced something that YOU DO HAVE - but you don't tell the buyers that one. Tesla 3 depositors KNOW that it is not yet being produced. The deposit actually does not even guarantee a price even.

MDarringer - 4/2/2017 1:58:03 PM

+1 Boost

@TomM this is the definition of bait and switch. Read your own response. You proved my point for me.