March 19, 2019

Tesla Is Coming Out With New, Cheaper Model 3

Tesla Is Coming Out With New, Cheaper Model 3

After just a little delay, Tesla is now offering a slightly cheaper version of its lowest priced car, the Model 3.

CEO Elon Musk announced the new version in a tweet early Friday, calling it a “lower cost, mid-range Tesla Model 3.” The new version will have a starting price of $45,000.

Previously the cheapest version of the Model 3 available started at $49,000.

The mid-range battery can take the car 260 miles on a single charge. Battery range is one of the determining factors in the price of an electric vehicle.

The long range battery can last 310 miles, but those cars have a $54,000 starting price. (The previous $49,000 version of the Model 3 is no longer available. It combined the cheaper rear-wheel drive option with the pricier long range battery.)

Customers who buy Tesla before December 31 are eligible for a $7,500 tax credit. People who buy the new version might not make the deadline: Tesla says they’ll ship in six to ten weeks.

For the company’s customers, that credit falls to $3,750 on January 1, 2019 and to $1,875 on July 1, 2019. That means people holding out for the $35,000 version of the Model 3 won’t get the full tax credit. The credit for Tesla buyers disappears altogether in 2020.

Strapped for cash and in need of profit, the company built only the pricier dual motor all-wheel drive version of the Model 3 at the end of the third quarter, although it had previously built some rear-wheel drive Model 3’s. The new $45,000 model is rear-wheel drive.

Tesla has tried to reassure investors that it will be profitable in the third and fourth quarters of this year. The company delayed the roll-out of the $35,000 version of the Model 3 in order to raise the cash that Tesla needs.


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