Economy

The Affordable Tesla: Elon Musk Unveils Tesla's Cheapest Electric Car - Model 3

The Affordable Tesla: Elon Musk Unveils Tesla's Cheapest Electric Car - Model 3

Bottom line: Tesla is inching closer to offering its promised $35,000 Model 3 but we're not quite there yet.

The self-driving capability that Tesla Inc. customers have been able to pay for but not activate for two years is going on hiatus.

The credit will then drop to $1,875 on July 1st before being scrapped completely at the end of 2019.

Tesla originally touted the Model 3 as the auto it would mass-produce and price for mainstream consumers after first producing luxury vehicles in the Model S and Model X. That promise helped it lure in more than 400,000 pre-orders for the vehicle. But in California, it will cost $US35,000 after federal and state tax rebates, Musk said.

The midrange model is basically a long-range model with fewer cells in its battery pack, offering slightly slower acceleration and a lower top speed compared to the long-range model: a 0-60 miles per hour sprint takes 5.6 seconds instead of 4.5 seconds, and top speed is 125 miles per hour instead of 145.

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When Musk announced a performance version of the Model 3 in May that cost around $80,000, he said the company needed to reach higher levels of production and reduce costs. As Electrek noted, rear-wheel drive is now exclusive to the mid-range battery pack and the long-range pack was reduced to one powertrain option: dual motor all-wheel drive.

The company has long promised the Model 3 would be its vehicle for the masses, but it originally focused on building premium versions of the auto while it struggled to ramp up factory production. It's likely that some Model 3 customers who pre-ordered the $35,000 Model 3 in early 2016 won't benefit from any tax credit as a result. However, Tesla's ambitious $35,000 base version is nowhere to be seen due to production issues. For example, NY offers a further $2,000 incentive, dropping the price down to $35,500. Musk promised that even a base vehicle would be very well equipped.

This $75,000 Model X was seen in Harare this week and is believed to be the first fully electrical vehicle to be delivered to the country.

With today's announcement, Tesla has come through with lower pricing, but $45,000 before incentives is the starting point.

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