Tesla has reduced the price of its Model 3 sedan yet again. Tesla had already reduced its prices back in January, reducing the price by $2,000 so as to neutralize the impact of federal electric vehicle tax credits being cut.
Elon Musk has reduced prices further by a new $1,100. Now, if the cheapest variant costs $42,900, factoring into account incentives and potential gas savings, the price would be further brought down to $34,850. Musk’s announcement of this price cut was tweeted on February 5, following Tesla’s recent discontinuation of its costly customer referral program.
For a long time now, Tesla has been attempting to reduce the base price of the Model 3 to $35,000 before incentives, but Musk did not mention any dates as to when that would happen.
In addition to the discontinuation of its customer referral scheme, Tesla had also planned to cut 7% of its full-time workforce in its attempt to achieve the economies of scale it needs to achieve the $35,000 figure.
The federal tax credit for electric vehicles was $7,500 until October 2018, after which it was reduced to half. It is to be further reduced to just $1,875 in the middle of 2019. This would mean that Tesla and the like need to diminish the cost prices of its products if they wish to not lose customers.