How come the Tesla Model 3 costs $49,000 instead of the $35,000 they were originally advertised at?

From Quora: How come the Tesla Model 3 costs $49,000 instead of the $35,000 they were originally advertised at?

My Answer: Because they advertised the base model, not the average purchase model. Every manufacturer does this. The difference here is that Tesla does not appear to have ever had the intention of actually producing the base model at all. Or if they did, it will be far into the production life of the car and not in its first year.

Most automakers will advertise the base price of their vehicle prominently knowing that most buyers will not actually want that base model once they’ve been to the dealers’ lot and seen the options. The majority of sales in automotive are in the mid-tier models/trim levels of a vehicle. These are vehicles whose options are 15–25% higher in price than the base model.

As an example, the best-selling vehicle in the U.S. right now is the Ford F-150. Its base price is based on a single cab (two-door), no-options, zero-frills version of the truck. It’s most popular sales trim (discounting commercial fleet sales) is the XLT with the 302A package. That’s about 20% higher in price than is the base offering and goes up even more when you consider most do not buy the standard cab, but upgrade to the SuperCab or SuperCrew instead. Most also add on 4×4 capability, which also adds to the price.

The same thing has happened with the Model 3. Many people did opt in at the base level, but many more opted in with more things added on and some of those who originally opted in at the base offering later upgraded their order.

It’s how the automotive business works.

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