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Tesla is finally making a lower-cost Model 3 (TSLA)

Troy Wolverton
Tesla Model 3 Review

Matthew DeBord/BI


  • Tesla is introducing a lower-priced version of its Model 3 sedan.
  • The base price will be $45,000; it will cost about $35,000 in California after federal and state tax rebates.
  • The company has long promised the Model 3 would be its vehicle for the masses, but it originally focused on building premium versions of the car while it struggled to ramp up factory production.

Tesla is finally offering a less expensive version of its Model 3 electric car.

The company has relased and is taking orders for a "lower cost, mid-range" version of its mass-production vehicle, Tesla CEO Elon Musk announced Thursday on Twitter. The base price will be $45,000. But in California, it will cost $35,000 after federal and state tax rebates, Musk said.

Tesla expects to begin deliveries in about four months, a company representative said.

The new midrange version of the Model 3 has a single motor and rear-wheel drive, and a battery pack that will go around 260 miles on a charge. The performance and long-range versions each have all-wheel-drive and dual motors and battery packs that will go some 310 miles on a full charge.

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Just released lower cost, mid-range Tesla Model 3 & super simple new order page https://t.co/cz0TQn7IOZ Tweet Embed:
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Costs $35k after federal & state tax rebates in California, but true cost of ownership is closer to $31k after gas savings

Musk said Tesla has set up a new web page to take orders for the lower priced Model 3. On that page, customers can choose one of three versions of the Model 3 — the top-of-the-line performance version, the long-range battery one, and the new midrange battery variant.

Screen shot of new Model 3 order page from Tesla

Tesla

To date, the company had only been offering more expensive versions of the car. The Model 3 Performance, for example, has a base price of $64,000 before any options are added — and that's before the tax incentives, but it also doesn't include features like the company's "Autopilot" driver-assist system, which many customers choose to add on.

Tesla still isn't making the Model 3 for the masses

Tesla originally touted the Model 3 as the car it would mass-produce and price for mainstream consumers after first producing luxury vehicles in the Model S and Model X. That promise helped it lure in more than 400,000 pre-orders for the vehicle. But Tesla has struggled to ramp up production on the Model 3 and initially focused on making the higher-end versions.

Even the new version, though, doesn't fulfill the company's promises. Musk has said that the company plans to offer a version of the car that will have a base price of just $35,000 before any tax incentives. Although he's promised that Model 3 will be out by the end of this year, some car industry experts are dubious he'll deliver.

Hitting that price target is important, because the federal tax incentives — worth up to $7,500 per car — are due to start dwindling in January. When they do, the amount that customers will effectively pay for a Model 3 will much be closer to the list price of the vehicle.

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