Tesla offers model 3 of $ 35,000, promised by Elon Musk



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Tesla is finally ready to offer a version of its Model 3 sedan at a starting price of $ 35,000.

The company began Thursday to accept orders for the cheaper version, with delivery within two to four weeks. He said the base model 3 would have a range of 220 km before needing a charge and would come with a different interior than the more expensive versions of the car.

The new offering marks a milestone for Tesla, whose CEO, Elon Musk, has long promised a $ 35,000 model. But the company struggled to cut costs enough to sell such a car.

"We have been working in this direction since the beginning of the business," Musk said in a conference call with reporters. "It has been incredibly difficult."

The automaker also began selling a model 3 version with a range of 240 km and a starting price of $ 37,000. Previously, the cheapest model 3 was selling about $ 43,000 before tax incentives.

Tesla announced earnings in the third and fourth quarters of 2018 by increasing production of the Model 3, its most affordable car. But sales seem to have slowed this year. A $ 7,500 federal tax credit available on Tesla cars last year was halved on Jan. 1. It will be reduced to $ 1,875 in July and will be phased out next year.

Mr. Musk has long claimed that Tesla must offer a $ 35,000 car to attract big buyers who might be skeptical about electric vehicles for reasons of cost, loading time and other reasons. A broader customer base would also allow the company to realize the economies of scale that Tesla needs to generate consistent earnings.

Mr Musk declined to say what profit margin the company expected from Model 3 sales at $ 35,000, but said Tesla would not make money in the first quarter. "Given the fact that a lot of things are happening in the first quarter, we do not expect to be profitable in the first quarter," he said. But he added that the company is expected to return to profitability in the second quarter.

The company's shares fell more than 3% in prolonged trading on Thursday.

Mr Musk also said that the company was only taking orders online, that it would close some exhibition halls and reduce its workforce. "There is no other way for us to save money for this car to be financially viable," he said.

He declined to say how many bookings the company still had from customers who had shown interest in buying a model 3. Last summer, Tesla had more than 400,000 orders for the car. "The reservation list is not important," said Musk.

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