Model Y Larger But with Same Battery as Model 3
Tesla reduced the price of Model 3 to a base of $35,000, according to a story in Futurism.com. The story cites an email sent to Tesla’s retail stores.
“Tesla has been gradually releasing cheaper versions of the Model 3 over the last year, but it has never been able to bring the price down to $35,000 – the mass market price that they have been promising,” Futurism.com reported.
The price cut fits with the company’s strategy to offer a wider array of options and prices, setting the stage for its latest model.
Elon Musk, Tesla CEO, tweeted on Sunday that the introduction of the company’s newest model, an SUV that’s slightly smaller than the Model X, will occur on March 14. According to Electrek.com, the Model Y will be 10 percent larger than the Model 3, with a price tag that’s 10 percent more.
A prototype of Tesla’s Model 3 successor will be available for rides at the event. Model Y will share 75 percent of the Model 3’s components, built on the same platform and with the same battery, limiting its range to less than its predecessor. The cars will be produced in Tesla’s Gigafactory in Nevada.
Musk also promised to reveal a Tesla truck later in the year.
Not everyone praised Musk’s announcement, and some analysts commented that it’s not a good sign for the company, which has struggled with quality issues. According to Marketwatch.com, RBC analysts thought the announcement showed that the market is softening for Tesla cars.
“We believe there has been a fall-off in U.S. demand and softer-than-expected demand in Europe/China,” they said in the Sunday note. “Price cuts on the Model S/X/3 globally supports the view that overall demand has softened.”
The price cut for the Model 3 caught the analysts’ attention because of its timing, just after Tesla repaid $920 million in convertible notes, wiping out a quarter of its cash.