Tesla (TSLA - Get Report) is prioritizing the launch of costlier versions of its Model 3 sedan over making the $35,000 Standard version that many of the company's 450,000-plus Model 3 reservation holders seem interested in buying.
Recently, the company unveiled a $5,000 all-wheel drive option for the $44,000 Long Range version of the Model 3, along with a $78,000 Performance version of the car. Both versions are set to begin production in July. By comparison, the Standard version of the car isn't forecast to see deliveries until "late 2018."
Profit considerations seem to be driving Tesla's decision-making: The company's Model 3 gross margin (GM) was said by the company to be "slightly negative" in Q1, and Elon Musk recently declared Tesla would "lose money and die" if it began making the Standard version right away.
Tesla does forecast its Model 3 GM will be around 20% by the end of 2018, but based on the way things look right now, getting there might require the Standard version to be a limited part of Tesla's sales mix.
And that probably wouldn't sit well with many Model 3 reservation holders.