Tesla has recently lowered the price of the Model 3 cars by $1,100 making the starting price down to $42,900 before incentives. All three versions of the car saw the same price reduction, including rear-wheel drive, all-wheel drive, and performance models.
In a statement posted by Electreka Tesla spokesperson said that the reduction was primarily due to the ending of the company’s referral program on February 1st, which the company said cost far more than realized. The program was originally intended to boost demand by promoting word-of-mouth marketing, but the long waiting lists for its vehicles suggest this is no longer necessary.
Now the cheapest Tesla costs $39,150 after taking advantage of the federal tax credit, which is due to be cut in half in July, effectively adding $1,875 to the cost of Tesla’s cars. An unsubsidized $35,000 starting price is the goal for the Model 3. It’s a target price that represents both affordability and mass-market scale. However, in a follow-up tweet, Tesla CEO Elon Musk said that it’s a super hard grind to reach this price.
Elon Musk, has already talked about the need to increase the production rate and make manufacturing design improvements in order to reduce the price of its cars on the way to the elusive $35,000 target. In a letter sent back in January announcing layoffs, Musk said that the company needed to achieve greater economies of scale if it wanted to produce the $35,000 version of the Model 3, and still be a viable company.
