Electric cars

Tesla Model 3 for those without $47,000 – but there’s a catch

Tesla Model 3 for those without $47,000 - but there's a catch

Despite Tesla’s promises, a widely available and more affordable car from the premium electric vehicle company has yet to appear, leaving potential owners empty-handed.

Now, San Francisco startup Kyte, with $239 million in funding, aims to meet some of the demand. However, there’s a catch: you can have a Model 3 sedan, but you can’t keep it.

Starting in two weeks, if all goes as planned, motorists in San Francisco and part of the East Bay between El Cerrito and Alameda will be able to get their hands on a Model 3 via a “subscription” and with no down payment. Even at the April 15 launch, customers in the South Bay, other East Bay and Peninsula regions will be considered on a case-by-case basis, Kyte said, and the company aims to expand its service area to more of the bay area.

Options are available for durations and prices: three months for $1,350 per month; six months for $1,125 per month; or a year for $995 per month. Subscribers get 1,000 miles per month and can add miles for an additional fee. An optional collision waiver adds $250 per month, and there’s a one-time start-up fee of $299.

Kyte, an on-demand car rental company founded in 2019, isn’t the only company letting drivers get behind the wheel of a Model 3 without buying one. Hertz rents them in certain areas. Tesla, which recently moved its headquarters from Palo Alto to Austin and manufactures cars in Fremont, offers leasing, and Autonomy in Southern California has its own “subscription” program. But Kyte touts convenience, providing a liability-insured vehicle with roadside assistance and no deposit, delivered to the customer’s doorstep and picked up at the end of the term.

Tesla offers a three-year lease on the Model 3 for a much lower price of $468 per month for 10,000 annual miles, but requires an upfront payment of $5,663 and the owner must have insurance. Santa Monica-based Autonomy charges $490 per month for 1,000 miles per month, and like Kyte offers a three-month option, but requires a $4,900 “start-up fee” and also requires the driver to have insurance .

Kyte is offering the program in response to the widespread and rapid move towards electric vehicles, said Kyte Chief Product Officer Erik Zahnlecker.

“We don’t just want to be innovators in how we give people access to cars, but we want to be a catalyst for the rapid change that’s happening in the transportation industry as a whole,” Zahnlecker said.

For years, Elon Musk’s electric car company has been committed to producing a $35,000 Model 3. After a short period of availability at this price, the Model 3 is now priced at $47,000. But more than 300,000 people had deposited refundable deposits for the $35,000 version in the first week Tesla was taking pre-orders, the automaker said, suggesting huge demand among drivers who are unwilling or unable to not shell out close to $50,000.

Kyte, which is also launching the service in New York, said it is starting with a “double-digit” number of Model 3s, purchased directly from Tesla, and aims to have hundreds available. The company has no special relationship with Tesla, a spokesperson said.