Tesla Model 3 Price Cut for Second Time This Year

  • by Shawn Tate
  • in Economy
  • — Feb 7, 2019
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The move follows a US$2,000 price cut on all Teslas announced in early January to partially offset the reduction in the USA federal tax credit its vehicles were eligible for. Tesla said in a statement that ending the costly referral program allowed it to cut the Model 3 price. The price cut does not quite offset the disappearance of the tax credit for Tesla buyers, but it does offer a partial redress for it.

The Model 3, which was previously $44,000, was initially supposed to cost $35,000 when it was first introduced in 2016, CNN reported.

In a reply to a Twitter user asking about when Tesla would drop the Model 3 base price to $35,000, without credits, Musk said, "We're doing everything we can to get there.

The incremental reductions in price are the result of a war Tesla's team is waging on bringing costs down.

"The demand for - the demand for Model 3 is insanely high. It's just like people literally don't have the money to buy the auto", Musk during the company's earnings call last week. The automaker has been picking away at costs through simplifying the lineup - the Model S and Model X will now only be offered with a 100-kWh battery, locked by software for some buyers - while also eliminating some options on the Model 3.

The starting cost of the Model 3 is now about $35,000, after about $8,000 of credits and fuel savings, Tesla Chief Executive Officer Elon Musk tweeted.

Musk, 47, announced to employees last month that Tesla would reduce headcount by about 7 percent, citing the challenges the company faces making its vehicles affordable without compromising profitability. The upcoming model will be.

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