Economy

Tesla starts taking orders for shorter-range $45,000 Model 3

Tesla starts taking orders for shorter-range $45,000 Model 3

Tesla has started selling a new variant of the Model 3 compact electric sedan, but it's not the $35,000 variant that the world was promised two and a half years ago.

Adding the mid-priced version of the Model 3 appears to be a strategic way to lure possible buyers who had been waiting for the lower-priced version.

The credit will then drop to $1,875 on July 1st before being scrapped completely at the end of 2019.

While the cheaper version of the auto is significantly lower than the $54,000 base price for the all-wheel-drive version that Tesla has been selling, some bears are honing in on various drawbacks of the model, as well as citing a great level of uncertainty that still surrounds Tesla's first mass-market vehicle, promised at a baseline price of $35,000.

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The cheaper "standard-range" Model 3 is still absent from the new, simplified ordering page, and the company has made no secret of the fact that it can not afford to lose money selling the cheaper cars, no matter the demand. One that's missing-from all new Tesla orders, not just the Model 3-is the controversial "full self-driving" option. Offering cheaper versions of the vehicle raised a "big and unanswered question" of Tesla maintaining profit targets for the auto, he said.

The newer Model 3 is also slower than its all-wheel drive counterparts, needing 5.6 seconds to reach 60 miles per hour and topping out at just 125 miles per hour. A cheaper rear-wheel version will no longer be available. Those include a $7,500 federal subsidy for electric vehicles delivered on or before December 31, which gets cut in half on January 1. CEO Elon Musk recently noted that focusing on the cheaper vehicle first would cause Tesla to "die," because it's not profitable to make. Tesla compiled a quarter million reservations within days, but has not been able to deliver on that sticker price.

When Musk announced a performance version of the Model 3 in May that cost around $80,000, he said the company needed to reach higher levels of production and reduce costs. The reason? It was "causing too much confusion", Musk tweeted.

Tesla says the "standard battery" version will not be available for another 4 to 6 months. The all-wheel drive powertrain returned to its previous value of $5,000 which brings the long-range Model 3 to $54,000.