Tesla releases less expensive Model 3

Tesla Model 3 Review

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Musk late Thursday announced Tesla's lowest-cost version yet of its newest vehicle, with the CEO writing in a tweet that the mid-range Model 3 "costs $35k after federal & state tax rebates in California", but pegging its ultimate ownership cost at an even lower price point given the money saved not buying gas. It is not clear how numerous more than 400,000 reservations for the Model 3 are for the base models. Musk did hint that the cheapest Model 3 may arrive early next year, tweeting that shipping cars with partially filled battery packs was better than waiting until February.

Chief Executive Officer 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. However, as Reuters reports, this week Tesla introduced a rear-wheel drive mid range battery model for $45,000.

The automaker announced it is now offering a lower cost Tesla Model 3 with a "mid-range" battery, and unveiled a simple new order page to buy it from.

The electric-car maker has started taking orders for a mid-range battery Model 3 that goes about 260 miles between charges for $45,000. Offering cheaper versions of the vehicle raised a "big and unanswered question" of Tesla maintaining profit targets for the auto, he said. A cheaper rear-wheel version will no longer be available. Any new Tesla delivered after January 1st 2019 (but before July 1st 2019) is only eligible for a $3,750 IRS credit.

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Until today, there's been two versions of the Model 3 available. Within days, the company had more than a quarter million reservations.

Musk said on Twitter in May that if the company shipped the $35,000 version right away, Tesla would "lose money [and] die".

Tesla shares rose 1.3% to $267.43 in German trading compared to the previous day's U.S. close as of 10:45 a.m.in Frankfurt. By keeping the same pack, but installing fewer cells, Musk commented that "we can get it done now instead of ~February", referring to when Tesla had last targeted production of the Standard Range model.

"True cost of ownership is closer to $31k after gas savings", Musk claimed.

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