Tesla has declared it will start marketing Model 3 of its car at the price of USD 35,000 (£26,400). The company announced. To make the reduced price “financially sustainable”, the company is opting for online sales model. The model 3 was launched in 2016 and was priced at USD 50,000 in the month of September.
By closing the stores the firm would save almost 5% of cost and reduce prices all across its vehicle productions. The company president however declined to mention the number of expected job losses but did mention that the change was necessary.
More than 400,000 customers booked the car when it was announced but owing to production issue and increased cost and other related delays caused troubles after its launch. Since last year, the company has reworked on batteries, manufacturing process and reduced costs together reduced the price at the same time keeping the profit margins intact. The firm is ready to face loss for the current on-going quarter of the year, in spite of the reported profits in the final 6 months of 2018.
The model 3 car is expected to bring the car Tesla into a pocket friendly bracket and thus have a new prospective customer base. Still it is priced on the higher side but considering that it is the first car in the segment of luxury electric vehicle, it is prized. The new production capabilities has made it possible to provide cost-effective solution to consumers.
To deliver a car for USD 35,000 which is at par with the average cost of a new car in the U.S. region is expected to be game changer for Tesla’s growth.