“Insanely Difficult” – Tesla To Launch The Cheaper Versions Of Model 3

Tesla announced the launch of the long-promised standard Model 3 with a shorter range and new interior options. It will start selling a version of its Model 3 in the US at a price of $35,000 (£26,400), fulfilling a promise it made more than two years ago. With the development, Tesla said it was shifting to an online-only sales model to make the lower price “financially sustainable”.

“It has been insanely difficult,” Mr Musk said referring to the reduction of price on the $35,000 price promise. Closing down of the physical stores will help cut costs by about 5%, CEO Elon Musk said. Deliveries will begin within the next 2 to 4 weeks depending on the configuration in the US. In Europe, orders will open within the “next 3 to 6 months”.

It was Tesla’s long-term goal to make a car for the mass market, he said. This may be the car that brings Tesla into the affordability zone for a whole new type of customer. This may still seem incredibly expensive for almost all of us but for a luxury electric vehicle, this is new ground.

When it was first announced, more than 400,000 customers signed up for the car but production issues, higher prices and other delays caused troubles following its launch. The standard battery pack and interior had also been delayed on several occasions. To hit the lowest price while still protecting profit margins, the company shrunk the Model 3 battery, tweaked its manufacturing process, and reduced costs in other ways over the last year.

However, Mr Musk said the firm managed to scrape a profit in the final two quarters of 2018 but expects to post a loss for the first three months of this year, spooking investors. The online-only sales may result in people losing jobs and Mr Musk declined to say how many but said making the change was necessary as Tesla works toward its bigger goal of making electric cars mainstream.

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