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Tesla Model 3 has an important upper middle class audience to please
As Elon Musk continues to focus on his top 3 priorities for Tesla, emphasis on preparing for Model 3 production – arguably the most important vehicle in the company’s history – couldn’t be more pertinent.
The Model 3 will be emblematic of Tesla’s capacity to offer a highly safe and efficient means of transport for a middle to upper middle class segment that largely depends on vehicle reliability in order to commute. It looks like these upwardly mobile folks are buying into that Tesla promise (pun intended): by October 2016, nearly 400,000 reservations had already been placed on the Tesla Model 3.
Starting at $35,000 before incentives, the Model 3 will achieve a minimum of 215 miles of range per charge and has been designed to attain the highest safety ratings in every category. According to the Tesla website, “The Model 3 combines real world range, performance, safety, and spaciousness into a premium sedan that only Tesla can build.” Potential Model 3 buyers make a reservation through the company’s website by putting down a $1000 deposit. The Model 3 has a starting price of about half the base price of the flagship Tesla Model S and has the size and stance of the Mazda 3.
Jessica Caldwell, an Edmunds.com analyst, argues that, if Tesla Motors wants “to bring the EV to the mass market, they need the Model 3 to be successful.”
The Model 3 will be a sedan, although other versions may one day include a Model Y compact SUV. Base rear-wheel-drive Model 3 vehicles are expected to achieve at least 215-miles of range; all-wheel drive will be offered, and a larger battery capacity with longer range is expected. Tesla’s Full Self-Driving Capability is also expected to be a standard offering.
“This is their chance to prove that they are not just a specialized niche automaker, but actually a long-term volume automaker,” said Karl Brauer, an analyst at Kelley Blue Book. “They have to establish that they can build a high-quality volume vehicle.”
Being upper middle class is a swirling confluence of financial comfort, identity, dreams, and lifestyle options. The Tesla Model 3 may very well become one of the most significant markers of status stability, with its associated components of having a college education, white-collar work, economic security, and home ownership. Soon, many upwardly mobile consumers will be adding “owning a Tesla” to that definition. Indeed, fewer than 5% of reservation holders are likely to choose a minimalist entry level Model 3 car. By contrast, close to 7% say they intend to check every available check box in the Model 3 Design Configurator once it becomes available.
If there’s an option available, the future upscale Tesla Model 3 audience will get it, as the number of options will be new indicators of levels of wealth and class.
Of course, these soon-to-be Tesla owners will have high expectations for all aspects of the Tesla process. First production of Model 3 is still scheduled for mid 2017, while delivery estimates for new reservations are expected to take place mid 2018 or later. Musk admitted that Tesla had hubris in designing and engineering the complicated Model X. As a result, Tesla learned a lot about selling, building, and delivering, which it applied to the Model 3 with much greater production streamlining. “With any new technology, it takes multiple iterations and economies of scale before you can make it affordable,” Musk has said. A mass-market car “was only possible to do . . . after going through the prior steps.”
The Model 3 is the next step in the learning process, but Tesla has done the preparation.
The Model 3 was unveiled in March of 2016 with operational prototype cars. In anticipation of much higher delivery numbers associated with the Model 3, Tesla hired former Audi executive Peter Hochholdinger as its Vice President of Vehicle Production. Hochholdinger had been in charge of production for the A4, A5, and Q5 vehicles, with around 400,000 vehicles per year under his watch. He should be a key asset as Tesla looks to roll out Model 3s in quantities that far exceed the number of cars the company has made to date.
Tesla has dealt lately with some supplier issues and has brought production of some components in-house. Other components, however, continue to be manufactured by established companies. For example, reports indicate that the Model 3’s center touchscreen will be supplied by LG Display.
By spring 2017, Model 3 photos and videos — shot both by bystanders and insiders — should start to circulate. Eventually, too, the government will need to ascertain the safety of Model 3 via crash-testing, and resulting reports will have a big impact on eventual delivery dates.
The Model 3 sedan will use some of the same glass technology that the company is using for its solar roof tiles, which should introduce an upper middle class audience to new ways of thinking about residential energy systems. The Model 3 is said to accelerate with an alluring still rush. It is just that rush— as well as zero-emissions and self-driving capability— that the upper middle class market has been awaiting.
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Tesla CEO Elon Musk outlines expectations for Cybercab production
“…initial production is always very slow and follows an S-curve. The speed of production ramp is inversely proportionate to how many new parts and steps there are. For Cybercab and Optimus, almost everything is new, so the early production rate will be agonizingly slow, but eventually end up being insanely fast.”
Tesla CEO Elon Musk outlined expectations for Cybercab production as the vehicle is officially set to start rolling off manufacturing lines at the company’s Giga Texas factory in less than 100 days.
Cybercab is specifically designed and catered to Tesla’s self-driving platform and Robotaxi ride-hailing service. The company has been pushing hard to meet its self-set expectations for rolling out an effective self-driving suite, and with the Cybercab coming in under 100 days, it now needs to push for Unsupervised Self-Driving in the same time frame.
Tesla CEO Elon Musk confirms Robotaxi is set to go unsupervised
This is especially pertinent because the Cybercab is expected to be built without a steering wheel or pedals, and although some executives have said they would build the car with those things if it were necessary.
However, Musk has maintained that the Cybercab will not have either of those things: it will have two seats and a screen, and that’s it.
With production scheduled for less than 100 days, Musk broke down what people should expect from the initial manufacturing phases, being cautiously optimistic about what the early stages will likely entail:
“…initial production is always very slow and follows an S-curve. The speed of production ramp is inversely proportionate to how many new parts and steps there are. For Cybercab and Optimus, almost everything is new, so the early production rate will be agonizingly slow, but eventually end up being insanely fast.”
Musk knows better than most about the challenges of ramping up production of vehicles. With the Model 3, Musk routinely refers to it as “production hell.” The Cybertruck, because of its polarizing design and stainless steel exterior, also presented challenges to Tesla.
With the important caveat that initial production is always very slow and follows an S-curve.
The speed of the production ramp is inversely proportionate to how many new parts and steps there are.
For Cybercab and Optimus, almost everything is new, so the early production…
— Elon Musk (@elonmusk) January 20, 2026
The Cybercab definitely presents an easier production process for Tesla, and the company plans to build millions of units per year.
Musk said back in October 2024:
“We’re aiming for at least 2 million units a year of Cybercab. That will be in more than one factory, but I think it’s at least 2 million units a year, maybe 4 million ultimately.”
When April comes, we will find out exactly how things will move forward with Cybercab production.
Tesla has revealed an awesome Model 3 and Model Y incentive to help consumers make the jump to one of its affordable mass-market vehicles, but it’s ending soon.
Tesla is offering one free upgrade on eligible inventory of the Model 3 and Model Y until February 2.
This would help buyers receive the most expensive paid option on the vehicle at no additional cost, meaning white interior or a more premium paint option will be free of charge if you take delivery on or before February 2.
Tesla states on its website for the offer:
“Only for limited inventory while supplies last. Price displayed on inventory listings already deducts the cost of the free option.”
Tesla says its one free upgrade offer on eligible U.S. inventory for the Model 3 and Model Y ends February 2.
With this incentive, buyers receive the most expensive paid option on the vehicle at no additional cost (up to $2k in savings). pic.twitter.com/IhoiURrsDI
— Sawyer Merritt (@SawyerMerritt) January 21, 2026
This latest incentive is just another advantage Tesla has by selling its vehicles directly and not using some sort of dealership model that relies on approvals from higher-ups. It is important to note that these programs are offered to help stimulate demand and push vehicles into customers’ hands.
It is not the only incentive Tesla is currently offering, either. In fact, there is a much larger incentive program that Tesla is working on, and it has to do with Full Self-Driving transfers, which could result in even more sales for the company through Q1.
Tesla is ending its FSD Transfer program on March 31, as it plans to transition to a Subscription-only basis with the self-driving suite for anyone who has not already purchased it outright.
This could help drive some on-the-fence buyers to new vehicles, but it remains to be seen. Given the timing of the program’s demise, it appears Tesla is hoping to use it to add additional sales and bolster a strong Q1 2026.
Interior and exterior paint colors can add up to $2,000 if you choose the most premium Ultra Red body color, or an additional $1,000 for the Black and White interior option. The discount, while small, could help get someone their preferred design configuration, instead of settling for something that is not quite what they want.
Tesla Full Self-Driving is getting an outrageous insurance offer with insanely cheap rates that will slash the cost of coverage by 50 percent.
Lemonade, a digital insurance company, has launched its first-of-a-kind product known as Lemonade Autonomous Car Insurance, and it is starting with an exclusive offer to FSD. The new offer will cut rates for FSD-engaged driving by “approximately 50 percent,” highlighting the data that shows a significantly safer driving environment when the suite is activated and engaged.
The company also said it plans to introduce even cheaper rates as Tesla continues to release more advanced FSD versions through software updates. Tesla has been releasing new FSD versions every few weeks, highlighting vast improvements for those who have the latest AI4 chip.
The announcement comes just a few months afterLemonade Co-Founder and President Shai Wininger said that he wanted to insure FSD vehicles for “almost free.” He said that Tesla’s API complemented Lemonade’s AI-based platform because it provides “richer and more accurate driving behavior data than traditional UBI devices.”
Tesla Full Self-Driving gets an offer to be insured for ‘almost free’
In mid-December, Lemonade then offered Tesla owners in California, Oregon, and Arizona the opportunity to connect their vehicles directly to the company’s app, which would provide a direct connection and would require a separate telematics device, which is required with other insurance providers who offer rates based on driving behaviors.
This latest development between Lemonade and Tesla is something that Wininger believes will be different because of the advanced nature of FSD:
“Traditional insurers treat a Tesla like any other car, and AI like any other driver. But a car that sees 360 degrees, never gets drowsy, and reacts in milliseconds can’t be compared to a human.”
He went on to say that the existing pay-per-mile product has given the company something that no traditional insurer has been able to offer. This comes through Lemonade’s “unique tech stack designed to collect massive amounts of real driving data for precise, dynamic pricing.”
The reputation FSD has gathered over the past few years is really impressive. Wininger backed this with some more compliments:
“Teslas driven with FSD are involved in far fewer accidents. By connecting to the Tesla onboard computer, our models are able to ingest incredibly nuanced sensor data that lets us price our insurance with higher precision than ever before.”
The product will begin its official rollout in Arizona on January 26. Oregon will get it a month later.
Tesla CEO Elon Musk outlines expectations for Cybercab production
Tesla reveals awesome Model 3 and Model Y incentive, but it’s ending soon
