$35K Model 3 ready to roll, Tesla says

Dwayne Harmon
March 2, 2019

"This is the only way to achieve the savings for this vehicle and be financially sustainable", Musk said. A "small number" of stores located in high-traffic areas will be converted to galleries, showcases, or information centers, the company says. It's worth noting that while the range and speed look excellent compared to, say, competitors like the Nissan Leaf 2.0, the standard range model does lack some niceties such as power seats. The important thing for customers in the United States to understand is that, with online sales, anyone in any state can quickly and easily buy a Tesla.

Bornstein, 45, said spending more than $50,000 completely online felt unusual, but he read numerous reviews and sat in a Model 3 at a Tesla store near his home before buying.

In a statement released by the company, Tesla announced that the company would be shifting all sales of Tesla vehicles online.

As for Tesla's profitability, it's retreating from earlier predictions - with Musk acknowledging Thursday the company will remain in the red in the first quarter. Some people are scoffing, "Who will buy a vehicle without a test drive?"

Tesla is closing all of its stores in a cost-cutting measure, so it can lower the starting price of its Model 3 to $35,000 (£26,400).

Tesla's stock fell 3 percent in extended trading after the news came out.

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Obviously, these cars are still pretty far out of reach for the average customer, but these price cuts might just be enough to convince those with extra cash to burn to buy into the Tesla ecosystem. The auto doesn't come with Tesla's full Autopilot driver assistance systems, but Musk said buyers will be able to upgrade their cars at a later date.

Morgan Stanley analyst Adam Jonas was skeptical of the newly prices Model 3 vehicle stating:"Tesla significantly increased its efforts to promote the sale of cheaper cars..."

In a bid to encourage buyers to shop online without test driving it at a physical location, the automaker is offering a seven day, 1,000-mile return policy.

According to Electrek, the base model will start at $35,000 with 130 mph top speed and 220 miles of range. "People get upset just buying clothes online that don't fit them". While we believe the introduction of the $35k Model 3 may be positive for overall program demand - which we and investors have been questioning given the phase out of the EV tax credit in the U.S. and price elasticity of demand for the higher priced vehicle variants - we also think this will drive a downward mix impact for Model 3 margins... But Musk said it's "likely" Tesla will bounce back with a profit during the April-June period.

As a result, over the next few months, we will be winding down many of our stores and significantly reducing our spend on sales and marketing, which will help make the price changes we've announced today possible.

Coupled with his SEC woes lingering overhead, Mr Musk hasn't exactly lost his investors' confidence, but he hasn't exactly filled them with it either.

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