Tesla to Close Stores to Reduce Costs for $35,000 Model 3

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Shifting all sales online combined with other ongoing cost efficiency will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point.

"If this model had come out when the Model 3 first launched and passion for Tesla was at its peak, shoppers might have given more latitude", Caldwell said.

In addition to the Model 3 news, Tesla said sales going forward would be online only, with the company saying that "a test drive prior to purchase isn't needed" because of a 7-day, 1,000-mile return policy.

As for the stores, some will be kept open but transition into "galleries" for Tesla cars instead.

The long-awaited "entry-level" Tesla Model 3 has now gone on sale in the U.S., with a United States $35,000 (£26,000) starting price and a 220-mile range - at the same time as the firm has moved all of its sales online only. Tesla says to its US buyers, "For 6% more money, you get 9% more range, more power, and an upgraded interior". As of January 1, 2020, new Tesla models will no longer be eligible for any federal tax credit. The company says this is necessary to be able to sell the Model 3 for $35,000 and still remain a financially sustainable company.

Tesla's $35k Model 3 isn't the only good news if you're in the market for an Elon Musk EV this week, with the automaker also slashing sizable amounts from the Model S and Model X. The change in pricing comes after Tesla announced a huge shake-up in how it will be selling cars, which means bad news for Tesla store staff, but good news for potential buyers. They're also revamping their return policy by allowing buyers to take back their vehicle within seven days or 1,000 miles if they're not happy.

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Tesla's cheaper Model 3 will soon face increased competition. That could help win some people over, particularly since you'll get a chance to learn over a few days or a thousand miles if you're truly comfortable with the vehicle before you decide to actually buy it. It is likely they will depreciate ahead of schedule, whereas a Model 3 should remain quite valuable.

Tesla is finally launching the long-promised standard Model 3 with a base price of $35,000 - fulfilling Elon Musk's "secret masterplan" released back in 2006.

Tesla pointed to its overall customer satisfaction rating from the magazine and said it has corrected numerous problems found in the survey.

According to the company, the standard Model 3 will offer a range of about 220 miles, a top speed of 130 mph, and 0-60 mph acceleration of about 5.6 seconds.

"We take feedback from our customers very seriously and quickly implement improvements any time we hear about issues", the company said, adding "we are already seeing a significant improvement in our field data".

"Last year featured a number of idiosyncratic events that shaped the Tesla narrative and, just 2 months into 2019, it seems to be another year of significant volatility, driven by both economic factors and company-specific factors", Jonas wrote in a research note, reaffirming his equal-weight rating.

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