Tesla’s Newest, Cheapest Model 3 Sedan Is Coming

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Tesla unexpectedly announced a mid-range battery option for the Model 3, bringing the price of the vehicle down to $45,000 and completely changing the pricing structure. In response, the company promised an upcoming model with a standard battery pack that will remain faithful to the initial price promise.

The base price will be $US45,000; it will cost about $US35,000 in California after federal and state tax rebates.

Tesla Inc on Thursday introduced a new $45,000 version of its Model 3 sedan on its website, launching the auto as US tax breaks for Tesla cars are about to decrease.

However, Tesla is promoting the auto as costing as little as $30,700 by factoring in "gas savings" and all possible federal and local electric vehicle tax incentives (but not the destination charge). A version wit a "standard battery", Tesla says, will be available within 6 months. Given previous Model 3 editions were selling for as much as $86,000, and that its luxury Model S and X cars go for well over $100,000, it's likely that more budget conscious Tesla fans will be eager to jump on the new opportunity to own a cheaper Model 3.

Priced from $45,000, the new variant uses the same battery as the Long-Range Model 3 but has fewer cells.

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The Mid Range comes with a single motor and rear-wheel drive whereas the Long Range and even pricier Model 3 Performance now come with dual motors and all-wheel drive exclusively.

The Model 3 is a four-door compact sedan that can seat up to "five adults comfortably, and the word comfortably is the key", Musk said. For example, NY offers a further $2,000 incentive, dropping the price down to $35,500. But Tesla has struggled to ramp up production on the Model 3 and initially focused on making the higher-end versions.

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

Hitting that price target is important, because the federal tax incentives - worth up to $US7,500 per vehicle - are due to start dwindling in January. Consequently, its range is down from 310 mile (498 km) to 260 miles (418 km).

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