Published: Thu, February 07, 2019
Markets | By Otis Pena

Tesla cuts Model 3 price again as tax credit is phased out

Tesla cuts Model 3 price again as tax credit is phased out

In an effort to lower the price of the auto, Musk, who is also the founder of rocket company SpaceX, has slashed more than 3,000 jobs and ended a customer referral program.

Tesla is cutting $1,100 from the base price of its auto designed for the mass market, the Model 3.

Tesla didn't comment on why it stopped this loyalty program, however, customers still hope that the Model 3 vehicle will be available at a more accessible price soon. Elon Musk promoted the new price cut on Twitter by pointing out that it brings the effective cost of ownership below that mark after federal tax credits and fuel savings over a similar gas-powered vehicle.

Musk, 47, announced to employees last month that Tesla would reduce headcount by about 7 percent, citing the challenges the company faces making its vehicles affordable without compromising profitability.

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These things take time, as pointed out by one follower on Twitter - to which Musk responded, "We're doing everything we can to get there". "It's a super hard grind", he wrote.

Musk also said on the call that the standard, shorter range $35,000 Model 3 may be available in the middle of this year, clarifying that it was a "rough, rough guess", and that current production is nearly entirely earmarked for upcoming deliveries to Europe and China.

Chief Executive Officer Elon Musk put an end to Tesla's referral program at the beginning of this month.

The Palo Alto, California-based company's share were down 0.45 percent at $319.89 in premarket trading on Wednesday.

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