Tesla Tries Another Trick to Sell Its Priciest Cars

Tesla  still isn’t letting reservation-holders place orders for the cheaper versions of its new Model 3 sedan. However, a few days ago, it notified would-be buyers that all orders placed by Oct. 15 would be delivered by year-end, making them eligible for the full $7,500 federal electric vehicle tax credit, which will start to phase out for Tesla purchases in January.

This is just the latest move by Tesla to pump up sales of its most expensive Model 3 variants — and of the even pricier Model S sedan and Model X SUV. It also adds to the evidence that Tesla simply cannot afford to sell Model 3s for $35,000, the advertised starting price.

Boosting average selling prices has been a priority

Tesla delivered its first Model 3 in mid-2017. To keep production as simple as possible, it only built rear-wheel-drive models with the long-range battery for the first year or so. That variant has a starting price of $49,000 (before options and any applicable tax credits).

A few months ago, Tesla began producing dual-motor all-wheel-drive versions of the Model 3, which are even pricier. This was part of a deliberate strategy to shift production to the most expensive — and thus most profitable — variants. (Indeed, Tesla reported earlier this month that more than half of the Model 3s produced during Q3 were dual-motor versions.)

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