Tesla is finally selling the Model 3 at the long-promised lower price of $35,000. The news came in February 2019, more than a year after Tesla began delivering the Model 3 sedan. But the lower-priced sedan comes at the cost of jobs. CEO Elon Musk claims the company will have to close stores and lay off workers in order to make this price point possible.
The base model will have a range of 220 miles before needing a charge and a top speed of 130 mph. Tesla also announced the introduction of a new version called the Model 3 Standard Range Plus with an upgraded interior, which can hit 140 mph and go 240 miles between charges. This version will start at $37,000.
Lower Price MeansJob Losses
In January Tesla announced the layoffs of 7 percent of its full-time workers and that the company would be shifting its sales worldwide to online only. Because customers will no longer have the option to test-drive a car, Tesla has revised its return policy, allowing people to return a car after 7 days or 1,000 miles for a full refund. After many manufacturing delays last year, the company surprised investors with back-to-back quarterly profits at the end of 2018after ramping up sales of the Model 3. But sales have slowed in 2019 and a federal tax credit that was available for electric cars was halved in January, will be reduced to $1,875 in July and eliminated completely next year.
Bringing the Model 3 to the Masses
Many in the car industry believe the new, more affordable price and ease of online purchasing, will broaden the appeal of the Model 3. Elon Musk has been saying for years that he wants to attract mainstream buyers who might be skeptical of electric cars because they’re so expensive, need charging and a host of other reasons. The company is hoping the car at this lower price will do the trick. Tesla had more than 400,000 orders for the car last summer.
Problems for Tesla
But it’s not all rosy for Tesla. After customers and reviewers raised concerns about the Model 3’s quality and reliability, reporting cracked windows, chipped paint and problems with the touch-screen displays, Consumer Reports said in February that it can longer recommend the car. The Model 3 will now be the least expensive long-range electric car on the market. Previously, the cheapest Model 3 sold for $42,000.
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