Tesla launches long-awaited $35,000 Model 3 as stores close and sales move online

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 1st Mar, 2019) London, Uk – –

Tesla has fulfilled its long awaited promise to start selling a $35,000 car, as it announced it would be closing stores and moving all sales online. 

The electric car company released a more affordable version of its Model 3 car for customers to order on its website last night, fulfilling a long-held commitment to make the car cheaper. 

Previously the most basic model available had cost $42,900 (£32,340), before factoring in tax incentives and fuel savings, but the company has said since the car's 2016 launch that it would eventually bring the price down to $35,000. 

“This is something we’ve been working on since we created the company, from the beginning this has been the goal,” said chief executive Elon Musk. “We’re incredibly excited to finally achieve this goal, it’s been insanely difficult.” 

The California-based firm also said it would be closing stores and moving to an online-only mode of sale, as well as extending the return policy to allow customers to keep the car for a week and drive up to 1,000 miles and still get a full refund. 

A limited number will stay open as customer information centres, galleries or showcases.

In the US it would be possible to buy a car on a mobile phone in one minute, said chief executive Elon Musk, adding: “It’s 2019, people want to buy things online”. 

He said some Tesla employees would lose their jobs as a result of the closures, adding that reducing the price of the car while keeping Tesla afloat had been “excruciatingly difficult”.

The company will also be “significantly increasing headcount” among service employees, he said, adding that the company's servicing department was reporting directly to him. 

US customers can order today and could get their car by  June, and it will be available for ordering outside the US in three to six months, Mr Musk added. Tesla recently launched the Model 3 in Europe and deliveries to the UK are due to start later this year.  

The cheapest available model will have a range of 220 miles, while an alternative $37,000 car will have 240 miles of range. 

Mr Musk said the company could release an even more affordable car in two to three years, but that the Model 3, Tesla's most affordable car, would not get any cheaper. 

Tesla turned a profit in the third and fourth quarters of last year, the first time it had done so in two years. Mr Musk said he did not expect the company to make a profit in the first quarter of this year. Shares fell 3.7pc in after-hours trading.

It began selling the Model S in 2012, followed by the Model X in 2015 and the Model 3 in 2017. 

The Models S and X will also get cheaper as a result of the shift online, Mr Musk said. 

By Olivia Rudgard