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Tesla unveils less expensive Model 3 option

A sign advertisement for the Tesla Model 3 sedan.
A sign for the Model 3 sedan in August. Photo: Saul Loeb/AFP/Getty Images

Tesla announced Thursday night that it's now selling a somewhat less costly, $45,000 version of its Model 3 sedan that has a 260-mile range.

Why it matters: The mass-market Model 3 is critical to the Silicon Valley automakers' future and, more broadly, pushing electric vehicles into the mainstream.

But, but, but: It's less expensive than models currently available, which start at $49,000 and go up significantly from there. But still not the $35,000 base price offering initially pledged when Tesla first announced the Model 3.

  • However, Tesla said via Twitter than with federal incentives and state tax rebates in California, the actual price "mid-range" battery option is around $35,000.
  • And Musk said via Twitter that "true cost of ownership is closer to $31k after gas savings."
  • Meanwhile, the actual $35,000 base model isn't available until next year.

Details: The new offering, according to Tesla, has a battery structure that's the same as pricier versions, but with fewer cells. It has a delivery time estimate of 6–10 weeks.

What they're saying: Over at Greentech Media, Julia Pyper notes that "Tesla supporters will likely see today's news as a positive development," and offers some important context...

  • "While the new Model 3 has a shorter range, rear-wheel drive and a slower top speed, Tesla succeeded in slashing $4,000 off of the price. That's something," she writes, noting it widens the number of people who can afford it.
  • However, she adds, the "Tesla website notes that the full $7,500 federal tax credit is only available to customers who take delivery by the end of the year (given the company has already hit the 200,000 unit tax credit limit)."