For the second time in as many months, Tesla lowered the price on the Model 3 as part of its ongoing effort to boost sales. As it stands now, the cheapest Model 3 available for purchase costs $42,900.
While overall demand for the Model 3 has never been much of an issue, Tesla still hasn’t released the $35,000 version it promised us quite a while back. To this point, Elon Musk a few months ago said that Tesla, for the time being, was focusing its energy on manufacturing mid-range models in the interest of profitability.
“Shipping the min cost Model 3 right now would cause Tesla to lose money and die,” Musk said on Twitter this past May. “Need 3 to 6 months after 5k/wk to ship $35k Tesla & live.”
Incidentally, Tesla hit a production rate of 5,000 units per week this past June, which is to say more than six months have elapsed and there’s no indication that the $35,000 model will become available anytime soon. Nonetheless, it does makes sense for Tesla to prioritize buyers interested in more expensive versions of the Model 3.
In an effort to put things in a positive light, Musk over Twitter this morning relayed that the cost of a Model 3 is essentially $35,000 once you take tax credits and fuel savings into account. Oh, he’s a crafty one that Musk!
In light of the price cut, it’s worth emphasizing that demand for the Model 3 is not waning. It’s more so that people are pining for the entry-level model they were promised a while back.
“The demand for Model 3 is insanely high,” Musk told investors late last month. “The inhibitor is affordability. It’s just like people literally don’t have the money to buy the car.”
Interestingly enough, Musk has alluded to Tesla rolling out a $25,000 version of the Model 3 sometime in the future. During an interview this past August, Musk said that Tesla remains committed to making “cars more affordable” but that doing so requires “high volume and economies of scale.”
“I think in order for us to get up to a $25,000 car, that’s something we can do,” Musk explained. “But if we work really hard I think maybe we can do that in about 3 years.”