Tesla Model 3: Will The Final Production Models Be Costlier?

Oct 24, 2016 05:00 AM EDT | Sovan Mandal

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The Tesla Model 3 with its $35,000 price tag no doubt brings an advanced electric vehicle within the reach of the masses. The goodies don't stop here as there also is the new self-driving system announced by the company that promises full Leve 5 autonomy within 2018.

However, while that's great news, the new enhanced hardware and software setup also costs $8000 extra. And it is exactly this that has led many to speculate how the cost of the autonomous driving suite is going to bear on the $35,000 that the Model 3 already has been priced at, according to Electrek .

Tesla CEO Elon Musk had earlier announced the new hardware suite will be equipped with all its cars that leave its production lines as of now. Naturally, that also applies to the Model 3 that is slated to go into production towards end-2017.

Musk had also announced the hardware suite comprising of eight cameras, a dozen ultrasonic sensors and a forward facing radar will be made available free of cost. However, buyers will have the option to go for either of the two software packages: 'Enhanced Autopilot' that costs $5,000 and 'Full Self-Driving' priced at $8,000.

While the above is not likely to make much of a difference to those buying the Model S or Model X, theoretically at least, that clearly isn't the case with those opting for the Model 3. Many who have reserved the budget electric sedan have gone for just the basic version to keep a cap on costs. Then there are also those who are banking on the federal tax incentive to procure the upcoming Tesla sedan.

That said, Musk had earlier stated the full Level 5 autonomy that will allow for true self-driving won't be arriving before 2018. Chances are that the price of the self-driving hardware suite will go down a bit by then owing to the adoption of better manufacturing techniques as well as the economy of scale with Model 3.

Meanwhile, Tesla also stated they are launching a ride-sharing service much on the lines of Uber. Christened Tesla Network, this will also serve as a means for Model 3 owners to recover some of the prices that the sedan costs.

Overall, it presents a strange kind of a situation for future Model 3 owners; possessing an EV that has advanced self-driving technology built-into it. However, invoking the system will cost them another $5000 at least, or $8000 for full-scale autonomy. That surely isn't cheap for a segment it is operating in and it remains to be seen if Musk has special plans for Model 3 owners who'd like to have a self-driving system installed on their cars.

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