Tesla cuts price of Model 3 - but not to $35K

Andrew Cummings
February 7, 2019

The big picture: Tesla has lowered the cost of its Model 3 for the second time in as many months although the entry-level electric sedan still hasn't reached the promised $35,000 base price.

The Model 3 Mid Range now starts at $42,900 and features rear-wheel-drive and a range of 264 miles per charge. 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.

Now, Tesla has updated its website to the new pricing which shows that once the federal tax credit of $US3,750 and a fuel savings (based on 10,000 miles and a cost of $US2.85 per gallon) are applied, USA drivers can buy the mid-range Model 3 for $US34,850 ($US49,049).

Tesla ended its customer referral incentive plan on february 1 after Musk tweeted that the referral program was "adding too much cost to the cars, especially Model 3".

Reminded by a Twitter follower that the promise was for a $35,000 auto without the fancy accounting, Musk replied: "We're doing everything we can to get there. Despite this price difference, Tesla CEO Elon Musk wrote a Twitter message on Wednesday that said the luxury vehicle will actually cost $35,000 if customers factor in $8,000 of credits and fuel savings.

Earlier this year Tesla cut the prices of all models by $2,000, citing the upcoming demise of the $7,500 federal tax credit.

The billionaire in the past few months has been pushing for cost-cutting initiatives, like cutting jobs and ending a customer referral program.

Other reports by iNewsToday