Elon just admitted something which is getting very little coverage – and no explanation.
He announced that Tesla will no longer be selling the “affordable” $35,000 Model 3 he promised would be Tesla’s first mass-market electric car. Like so many of Elon’s promises, that one’s out the window, too.
The price of the least expensive Tesla just rose to $39,000. Well, technically $38,990 – to make it go down easier.
That’s still a $4k decrease in “affordability” – and a reality check.
Elon is admitting that electric cars aren’t mass-market cars. That after all the glitzy assurances, after all these years, in the end, they are what they have always been: Specialty cars for people with the disposable income to indulge other-than-economic considerations such as “technology” and – as Elon loves to tout – the driving characteristics of electric cars. Amazon.com Gift Card i... Buy New $25.00 (as of 06:10 UTC - Details)
There’s nothing per se objectionable about specialty cars – whether electric or powered by a high-performance boxer six, like a Porsche.
But there is a problem.
There is a hard deck limit to the number of specialty cars that can be manufactured. It is a small number – because most people can’t afford to buy such cars. How many Porsches do you see vs. Corollas?
EVs are Porsches – economically speaking.
Both are cars for people with the ability to spend more than twice the cost of a well-equipped economy car.
Now imagine the government decreed everyone must drive a Porsche. This might not be such a bad thing – provided someone else pays for yours.
Who will pay for your electric car?