Tesla taking orders for Model 3 variant

Tesla Inc’s longpromised $35,000 (Dh128,000) version of the Model 3 sedan is still nowhere to be found, but it’s inching closer to that price point.

The electric-car maker has started taking orders for a mid-range battery Model 3 that goes about 418 kilometres, for $45,000, about $4,000 less than the starting price of the sedan that went on sale last year, excluding incentives or options.

Releasing a lower-priced Model 3 was a “logical next step,” Evercore ISI analyst Arndt Ellinghorst said. Offering cheaper versions raised a “big and unanswered question” of Tesla maintaining profit targets, he said.

While Tesla is making the Model 3 more accessible to some buyers, the starting price for sedans with the long-range battery is rising to $54,000. This iteration boasts 500km of driving range, a faster top speed and zero-to-60 time. A cheaper rear-wheel version will no longer be available.

Revving demand

Tesla CEO Elon Musk noted in a tweet that the mid-range Model 3 costs $35,000 after federal and state tax rebates in California, but the clock is ticking on buyers being able to get a big chunk of those savings.

Musk, 47, first unveiled the Model 3 to great fanfare in March 2016, pledging it would start at $35,000 before incentives. In days, it had more than a quarter million reservations. That sticker price is yet to be delivered two and a half years later, but sales have rivalled some top-selling passenger cars in the US last quarter.

Musk said they needed to reach higher levels of production and reduce costs. Shipping a $35,000 iteration right away would “cause Tesla to lose money & die,” he tweeted.