Tesla stock down 3% after releasing $35,000 Model 3 car
Tesla releases its long-awaited and more affordable Model 3 sedan.
Tesla is finally releasing the $35,000 Model 3 sedan. The car was promised to be offered at that affordable price since 2016. Chief executive officer, (CEO), Elon Musk, made the announcement after a week of mysterious tweets. Shares dropped 3% in US afterhours trading after Musk said the company won't be profitable in Q1.
Why did Elon Musk say it would be hard for Tesla to make a Q1 profit?
Though Musk wanted to make the more affordable car, he said that Tesla’s Q1 earnings may be less because of the sacrifices made for the Model 3.
‘It is excruciatingly difficult to make this car for $35,000 and still be financially sustainable,’ said Musk.
How is the Model 3 affordable at $35,000?
The new Model 3 car was able to be more affordable than its current $44,000 because of many changes Tesla made. The car company will only have online sales of its vehicles. The corporation made the announcement in a blog post.
‘You can buy your car on your phone in about one minute in the US. The important thing for customers in the United States to understand is that, with online sales, anyone in any state can quickly and easily buy a Tesla,’ promised Tesla in the post.
‘Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected,’ noted the company.
Tesla was also able to make the $35,000 Model 3 because the vehicle company is closing stores.
‘Over the next few months, we will be winding down many of our stores, with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers,’ wrote the company.
What features will the new Model 3 have?
The Standard Range base model can accelerate from 0-60 miles per hour(mph) in five seconds. The Model 3 can also go up to 130 mph. Musk praised the car and said there will still be tax credits for customers.
‘It’s an incredible car, and at $35,000 there are still some pretty significant consumer tax credits that can be had,’ said Musk.
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