Tesla Model 3 35k & the rest. Now What?

Resultado de imagem para Tesla Model 3

After digesting all the latest news regarding Tesla, namely the new Model 3 versions, the final balance was mostly good, but there was something for everyone: The amazingly awesome (35k Model 3, new Standard Plus version), the good (price drops around the range) and the concerning ones (Online only sales, store closures).

Let's start with the Amazingly Awesome:

-  The 35k Tesla Model 3 is finally here! After many delays and doubts, the car that made half a million buyers make a Model 3 reservation is finally here, and it has a few more features than expected, like  the glass roof, so now Tesla is now out of the "rich people toy" category, and into full-blown premium brand, hitting head on the BMW's and Mercedes prized bread 'n butter 3-Series and C-Class, as well as the most high end products of mainstream brands.

Before this expansion, the Model 3 versions only crushed competed against the most high end versions of the midsize Bimmers and Mercs, like the C300 (49k Euro) and upwards, leaving the juiciest part of the market left untounched for the established premium brands.

Now, with the Model 3 SR versions, said to be sold in Europe around 40k euro, even the cheapest version of the Merc C-Class, the C180 (41k euro), is being targeted, with either of the SR versions curshing the Mercedes, specs-wise.

The remaining Premium brands better get their midsize EVs developtment in the fast lane, or else...   

Now, the Good:

- The whole Tesla range had significant price drops, if this won't change much the edge of the high end Model 3 versions, that were already far more competitive than their ICE counterparts, both the Model S and X were in dire need of a price cut, as their prices still placed them in the "very rich people toy", along with Porsche and others, especially sice the 75D version was discontinued.

With the Model S now starting at 81k euro, the Model S price dropped significantly, making it really competitive against similar versions of the reamining pack, but it is still above the juiciest part of that market, as the cheapest Merc CLS starts at 69k euro. The Mercedes E-Class and BMW 5-Series start even lower.

So, while the price reduction will help the Model S/X sales, it won't make the same impact in thier category, that the Model 3 is going to do in the midsize category. 

Finally, the Concerning:

- Tesla realized that the 35k Model 3 was not going to be profitable without some major strategy change, hence the full bet in online sales, with the subsequent closure of most stores.

And here could lie a problem. While for a boutique brand, like Porsche or Jaguar, that could be done without major harm to sales, if Tesla wants to go after BMW, Mercedes and the like, it will need a larger network of stores, but most importantly, a big network of Service Centers.

With Tesla closing a big number of its already small network of stores (compared with the Premium major players), and apparently not investing heavily in a fast expansion of Service Centers, how will Tesla manage servicing/delivering/etc of lets say, one million of vehicles in couple of years? Chaos could be the word to describe it.

Is Tesla right in going all in with on online sales? 


    

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