Tesla announces US$35,000 version of Model 3; sees Q1 loss

March 01, 2019 09:21
A file picture shows the Tesla Model 3 sedan during a launch event in Hawthorne, California, on March 31, 2016. The company has announced a US$35,000 model three years after the debut. Photo: Reuters

US electric vehicle maker Tesla said in Thursday that it will offer a US$35,000 version of its Model 3 sedan with a delivery time of two to four weeks, Reuters reports.

The announcement comes nearly three years after Musk promised the car at that price to appeal to the mass market, the report noted.

The price drop could quell concerns from some analysts that demand for the higher-priced versions of the Model 3 was beginning to dry up, especially after a federal tax credit was cut in half this year.

Thursday was the third time this year that Tesla lowered the price on the Model 3, which recently started at US$42,900.

The new $35,000 version has a top speed of 130 miles per hour and can go from zero to 60 mph in 5.6 seconds, Tesla said. For US$2,000 more, Tesla offers a version with a range of 240 miles and a top speed of 140 mph, according to the report.

Tesla, meanwhile, also announced that it will close many of its retail stores worldwide, steps designed to cut overhead costs for the firm, and focus on online sales.

Chief Executive Elon Musk said on a conference call said that Tesla would not turn a profit in the first quarter but would return to profitability in the second, CNBC reported.

In its fourth-quarter shareholder letter, Tesla had said its “optimistic target” was for a “very small” net profit in the first quarter.

"Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6 percent on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected," Tesla said in a blog on its website.

As part of cost-cutting efforts, Tesla last month reduced its full-time headcount by 7 percent, following a similar cut of 9 percent to its workforce in June 2018.

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