$35,000 Tesla Model 3, "Full Self-Driving" returns, BMW-Mercedes auto sharing

Elon Musk Moves Tesla Shares With Cryptic Tweeting About News To Come

As a result of this change, Musk said there will be layoffs. That's part of the reason it can sell the cheaper Model 3 affordably, the company said.

Coinciding with the price drop, Tesla is also bringing back its "full self-driving" feature after it removed it in October, following criticism it was overstating the autonomy of its cars.

A new model with a different interior and slightly more range, the company said, is also available, for $2,000 more.

When Gary Bornstein spent $52,000 for a Tesla Model 3 last summer, he did it without taking a test drive or even seeing the auto that he now owns.

Along with the Model 3 announcement, Tesla said it will also close most of its showrooms around the world and shift sales to online only. Any Tesla bought between now and June 30 is eligible for a $3,750 tax credit, and any Tesla bought between July 1 and December 31 of this year will be eligible for a $1,875 tax credit. Many Tesla buyers swear by their cars even after dealing with issues such as long waits after putting down cash deposits or between when they buy and get their cars.

The store closures will come on top of a decision to cut 3,150 jobs, or about 7% of Tesla's workforce, announced in January. The company says this is necessary to be able to sell the Model 3 for $35,000 and still remain a financially sustainable company.

A $35,000 Model 3 is a major shot in the arm for Tesla sales during a period of major challenges, including deliveries of the Model 3 to Europe and China and construction of a factory in Shanghai.




Tesla said customers who were not satisfied with an online purchase could choose to return a vehicle within 7 days or 1,000 miles for a full refund.

The leap of faith may not transfer to people who want one of Tesla's more expensive models, the Models S and X, which can run well above $100,000.

Since unveiling the Model 3 in 2016, Musk has been promising a $35,000 version.

"Electric vehicles now make up only about 2 per cent of global sales, and while we believe that number is likely to grow, we believe there is an education process that is crucial for new customers around charging, range, and other features that are unique to Tesla that will not be as readily available without the in-store experience".

The "Standard Range" model has 220 miles of range with a top speed of 130 mph and it goes 0-60 in 5.6 seconds.

In addition to slashing the long-range versions, the Model S Performance version now costs $99,000, compared to $112,000. 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 United States 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...

Despite the austerity measures, Musk told reporters Tesla will lose money in the current quarter ending in March, backpedaling a statement he made last October when he pledged the company would remain profitable from that point on.

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