"There's no other way for us to achieve the savings required to produce this vehicle and be sustainable", Musk said. And yet, when it came on the market, it was only available in longer-range, more premium-configurations that were cheaper than the Model S or Model X, but would still set you back close to $50,000.
The company based in Palo Alto, California, is slashing costs only a few months after paying half of a $40 million settlement of a case that the US Securities and Exchange Commission filed against Musk last September after he tweeted that he had lined up financing for a potential buyout for the company.
On February 19, the CEO tweeted projections for 2019 Tesla manufacturing numbers at around 5,00,000 and hours later revised the estimate to 400,000.
Shares in the company were down 8.4% to $292.97 on Friday, the day after the announcement.
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. Some jobs will be cut and some employees will transition to different parts of the company, he said.
"We will be closing some stores, some reduction in headcount as a result, there's no question about that". The store closures have raised concerns over the company's future plans in the United Kingdom, with fears of further cuts and job losses across the country.
"Electric vehicles now make up only about 2 per cent of global sales, and while we believe that number is likely to grow, we believe there is an education process that is crucial for new customers around charging, range, and other features that are unique to Tesla that will not be as readily available without the in-store experience". "There's no other way for us to achieve the savings required to produce this auto and still remain profitable".
Tesla says potential buyers can now purchase a vehicle from their cell phone "in about 1 minute". He said moving away from stores will be "incredibly helpful" toward boosting deliveries.
"We think the overly negative sentiment on demand will start to improve in the coming weeks, which should drive shares higher".
May to give parliament a vote on no-deal Brexit
If her plans are backed by MPs on Wednesday, Mrs May will return to the Commons by March 12 for a further " meaningful vote". But she said such a move would ignore the wishes of millions of Labour voters who voted Leave at the 2016 referendum.
The announcement comes at a crucial time for Tesla (NASDAQ:TSLA), as US tax incentives for buying an electric vehicle are drying up.
"Tesla appeared to raise the required deposit amount to US$2,500 (from $1,000 previously)".
FILE PHOTO: A Tesla Model 3 sedan, its first vehicle aimed at the mass market, is displayed during its launch in Hawthorne, California, U.S. March 31, 2016.
Meanwhile, U.S. dealers remain sanguine about their position in the sales chain.
"Last year featured a number of idiosyncratic events that shaped the Tesla narrative and, just 2 months into 2019, it seems to be another year of significant volatility, driven by both economic factors and company-specific factors", Jonas wrote in a research note, reaffirming his equal-weight rating.
The CEO doubled down on his defense against the SEC's claims by reiterating comments he made on a January 30 earnings call that Tesla would sell as many as 500,000 Model 3s this year.
Musk said in a press call that long-time reservation holders will have priority for deliveries of the new version.
Musk, 47, settled a lawsuit in September with the SEC and agreed to get company approval before communicating material information to investors.