Tesla has finally begun selling a version of it’s Model 3 Sedan for $35,000 (or £26,400). The company’s colourful CEO, Elon Musk, teased the announcement on Wednesday via Twitter.
An Affordable Tesla
Tesla promised an ‘affordable’ version of its popular Model 3 over two years ago. The car was originally intended to be an alternative to its other luxury cars. However, even its cheapest trim levels have cost as much as $50,000; prohibitively expensive for most American motorists. The price drop represents the biggest push by the company to render EVs accessible for everyday drivers and consumers.
In addition to price drop, Musk also announced that there would be a shift away from physical stores to online transactions. He explained that closures would reduce overall costs by around 5%; allowing for the dramatic price drop. However, no specific numbers were given for how many stores would close or how many jobs would be affected. As it stands, there are 378 Tesla stores dotted around the globe. As well as store closures, the cheapest Model 3 has received a smaller battery and is assembled via an altered manufacturing process to make the drop profitable.
Musk also stated that he wasn’t concerned by physical store closures. He pointed out that the company is already fairly unique amongst car manufacturers in using a very small about of physical locations. He also mentioned that a test drive was superfluous, as “quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free” he wrote in a blog.
A Life Or Death Struggle
The price change comes at a critical time for Tesla, which has struggled to turn a profit over the course of its fifteen-year existence. It’s raison d’etre has always been to spearhead electric vehicles and therefore reduce harmful emissions. However, its cars thus far have been geared towards the luxury segment and wealthier consumers. At $35,000, it finally has an offering that reflects the average price of a car in the American market. Musk emphasised that it had been “insanely difficult” in offering the Model 3 at the lower price.
When Tesla first arrived, electric cars were a novelty; largely geared towards hardcore enthusiasts and the wealthy. Huge production costs and limited charging infrastructure made them inaccessible for most motorists. As a result, the company effectively managed to dominate a fairly niche area within the automotive industry. Now, however, the scenery has changed. Traditional automotive companies like Volkswagen and Ford are investing billions in fully electric models. Many of these are competitively priced. Commentators have pointed out that Tesla’s survival depends on its ability to manufacture and ship affordable EVs in a timely fashion.
Coming To Britain
The Model 3 is expected to launch in Britain in the latter half of 2019. Whether the lower trim level will be available is still to be confirmed. Recently, Model 3s have been arriving in Europe having been assembled in the United States. The company has already faced difficulties, dumping a cargo handling company and missing delivery deadlines. Either way, this enigmatic company and its exponential rise in the public psyche finally has a means of fighting back against very real competition to bring EVs to a mass-market.