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 discontinuing its customer referral scheme, Tesla had also planned to cut 7% of its full-time workforce to achieve the economies of scale it needs to achieve the $35,000 figure.
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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.