Before continuing, read Fortune Magazine’s latest bashing of Tesla based upon a slide presentation by a $6 million hedge fund manager. Seriously, $6 million? We have lawn care companies in Charleston that manage more than $6 million. Think of it as asking Joe the Plumber for his opinion on Tesla financials. What happened to independent thinking by magazine writers? If you’re too lazy to read the article, here’s a quick summary. Tesla will go bankrupt selling Model 3 Tesla’s for $35,000 when it costs them roughly $48,000 to manufacture them.
There’s so much wrong with the strawman-like premise that it’s difficult to know where to start. First, nobody is going to buy a Tesla Model 3 for $35,000. Read that again! Need a quick lesson in Tesla pricing? Visit the Tesla web site and calculate the price of a $55,000 Model S that you would actually want to own and drive. Base price works just about as well with a Tesla as it does for any other car in the world. It ain’t ever gonna happen. To get the model everyone will want is going to add at least another $25,000 to the price tag and probably more. If that’s too rich for your blood as an early adopter, get your deposit back!
Second, the Tesla Model 3 is not going to be competing against a $30,000 Chevy Bolt. If folks want a cheap, stripped down electric vehicle then Tesla is not the brand for you. One look at the cars should tell you why. But here are some other reasons. Which car gets over-the-air updates every month? Which car has access to nationwide charging stations out of the starting gate? Which car will have the capability to drive itself from your home to your office and then park itself after you step out at the front door? And which car will let you rent it out like an Uber without your having to be in the vehicle at all?
Bottom Line: Stop worrying about Elon Musk’s financials. He’s smarter than the $6 million hedge fund manager, and you’ll be begging to spend $70,000 for a Tesla Model 3 that can reward you with over $1,000 a month in rental income after dropping you off at work.