Tesla has finally acted on its promise to offer the Model 3 electric cars at $35,000 as standard. However, it’s now stopping sales on the spot in showrooms to ensure that it remains “financially sustainable” at a lower cost. The company claims that future sales worldwide will be exclusively online.
A large portion of the Tesla stores would close within the next few weeks, the company said on its website. Some stores in busy areas remain in operation as showcases, galleries, and information centers. However, potential buyers must sign up online to complete the purchase.
Tesla boasted of the ease of selling online:
“You can now purchase an Tesla for sale in North America via your phone within a minute or so, and the capability will soon be expanded to all over the world. We’re also making it easier to test drive and return an Tesla to ensure that the opportunity to test drive before purchasing is no longer required. You can now return your car in 7 days, or 1000 miles to receive a complete refund. You could purchase the Tesla and drive a few hundred miles on an afternoon road trip with your friends, and return it for a free.”
During a conference call with journalists, Tesla CEO Elon Musk claimed that cutting overheads would improve the company’s long-term financial stability. “Ultimately this will be a very strong competitive strength for Tesla,” Musk stated.
The announcement came after Musk revealed the mystery about the two p.m. PT announcement. Many speculated that Tesla would open the doors for its Model Y crossover SUV or offer a glimpse of the electric pickup truck that Musk claimed would have “something quite unique.”
The announcement instead fulfilled Musk’s decades-old pledge to the public that his Model 3 would be offered for sale at an “affordable” base price of $35,000. Tesla has been selling only models with a greater distance, higher prices, and larger profit margins to date.
The Standard Model 3 will have 220 miles of range with a top speed of 130 mph and the capability to accelerate from 0 to 60 miles per hour within 5.6 seconds. There’s also a Model 3 Standard Range Plus with a 240-mile distance with a top speed of 140 mph and acceleration from zero to 60 mph in 5.3 seconds. The price is $37,000, including incentives.
The Tesla store at Bellevue Square in Bellevue, Wash. (GeekWire Photo / Kurt Schlosser)
Tesla announced that the switch to selling online only, as well as “other ongoing cost efficiencies,” opens the door to lowering the price of vehicles to an average of around 6 percent, “allowing us to achieve the $35,000 Model 3 price point earlier than we expected.”
Reaching the price of $35,000 could boost sales at Tesla; however, it may also raise doubts about the profit margins for the company. Musk admitted that Tesla would likely post losses at the beginning of 2019 after generating a profit in the third and fourth quarters of 2018. fourth as well as Fourth quarters of 2018.
“Given that there is a lot happening in Q1, and we are taking a lot of one-time charges — there are a lot of challenges getting cars to China and Europe — we do not expect to be profitable.” Musk declared. “We do think that profitability in Q2 is likely.”
Tesla was also forced to face an issue sparked by Musk’s tweets on Model 3 production rates, which resulted in a renewed legal challenge by the Securities and Exchange Commission.
Because of this week’s flood of news, Tesla’s share price has been through several turns and twists and even an overnight slump that occurred after the announcement today.
Tesla Chief Executive Officer Elon Musk’s disagreement with the county’s authorities over the possibility of opening Tesla’s California automobile factory was brought into the Twitter stream of President Trump this morning.
- Musk is in a dispute against Alameda County health officials about the rules in the Fremont factory’s opening after the outbreak of coronavirus ordered the shutdown. In a statement on Monday morning, Musk declared that his name would appear “on the line” at the facility and urged authorities to take him into custody.
- The Washington Post reports Musk’s refusal to compromise has been viewed as a “symbol of the reopening movement” within the tech sector, and Trump has also drawn more attention to the issue. “California should allow Tesla and @elonmusk to start the plant now. It’s doable, fast, and safe! Trump tweeted. Musk tweeted in return his appreciation to Trump.
- The law in the state allows penalties of up to $1000 per period or up to 90 days in prison when operating in contravention of health regulations. But if we consider that the authorities have been working quietly with Tesla to develop a new plan, this could be nothing more than a tense situation for a Twitterbot.