Tesla Model 3 Buyers May Not Get Rebates
SAN FRANCISCO (CBS SF) -- For many, a Tesla starting at less than $35,000 seemed too good to be true, and it turns out for most it was.
Many counted on additional government subsidies and rebates to bring the price down, but analysts say they may be long gone before the first Tesla Model 3 ever hits the road.
From Washington to Walnut Creek, people lined up for blocks and were eager to drop $1,000 deposits just to get on the wait list for a car they've never seen.
What's attractive about the Model 3 is that more people can afford this car.
But what many would-be Tesla owners may not realize is that they may never see the federal subsidies that they estimated could reduce the starting price.
"The federal subsidy, which is $7,500 for every electric vehicle, runs out once the maker sells 200,000 cars of that model in a year," KCBS financial analyst Jason Brooks explains.
Tesla did say the car will eventually run up to $42,000, but it looks like "eventually" may be sooner than later, with over 270,000 Tesla's pre-sold in the first few days.
Tesla's finally coming up with what could be a mass-production hit and the subsidies won't last long.
But Brooks points out that $7,500 won't be a game changer for most in the market of the Tesla Model 3, though it could mean more people stick with the base model instead of opting for potentially pricy upgrades.
"Tesla has a lot of upgrades for this car, which some are calling the car for the iPhone generation," Brooks said.
Drivers in California who make less than $250,000 a year may still qualify for a state rebate of $2,500.
And Brooks points out that even at $42,000 this car still appeals to the masses. The big question for Tesla will be, can it keep up with demand and its scheduled production.
Failing to meet its production goals, like with the Model X, could ultimately be a bigger problem for Tesla.
Editor's note: A previous version of this story incorrectly said the $35,000 starting price for the Tesla Model 3 included incentives. The actual starting price of the vehicle is $35,000 before incentives. We regret the error.
