Tesla releases less expensive Model 3

Tesla Model 3

The automaker announced it is now offering a lower cost Tesla Model 3 with a "mid-range" battery, and unveiled a simple new order page to buy it from.

The announcement of the midrange model came with no early warning or indication that this model was being added to the lineup, catching Tesla watchers by surprise.

The Model 3 sedan now being offered by Tesla can travel about 260 miles between charges and costs $45,000, some $4,000 below the starting price of the sedan that the company began selling previous year, excluding options and incentives.

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Along with the mid-range option release, Tesla has altered its entire pricing structure for the Model 3 - both of which were unexpected.

There's an extra incentive to order a Tesla now rather than waiting.

On its build site, Tesla listed an estimated delivery in 6-10 weeks for the Mid Range model, as opposed to 4-8 weeks for the Long Range All-Wheel Drive or All-Wheel Drive Performance versions.

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Hitting that price target is important, because the federal tax incentives - worth up to $US7,500 per auto - are due to start dwindling in January. The "performance" version of the dual motor, all-wheel Model 3 starts at $64,000. This will be provided for free to customers who already paid for Full Self-Driving. Not huge losses overall - the 50-mile drop in range is the main tradeoff.

Tesla recently said to expect gross margins for the Model 3 to reach about 15% in Q3 and 20% in Q4, "predominantly due to continued reduction in manufacturing costs and to some extent an improving mix".

After incentives (federal tax credit) and potential gas savings (over a spread of six years), Tesla advertises the cost as being $33,200. In a statement, Tesla indicated that the delivery estimate for customers who immediately ordered the Standard Battery is four to six months.

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Elon Musk unveiled his latest creation - Tesla Model 3 to a crowd of fans packing the company's LA Design Studio on Thursday with a promise that the new electric vehicle will cost $35,000, accelerate to 60 miles an hour in under six seconds and run without recharging for at least 215 miles, pursuitist.com reported.

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