Tesla Model 3 Now Comes in a $45,000 ‘Mid-Range’ Version

Tesla Model 3

The brake discs and pads are designed to last for the life of the car

"You can't buy a better auto for $35,000 or even close even if you get no options", he promised.

Tesla late on Thursday started accepting orders for a more affordable Model 3 Mid Range sedan for buyers in the United States and Canada.

But that price takes into account federal and state tax rebates.

The release of a lower-priced Model 3 was a "logical next step", according to Evercore ISI analyst Arndt Ellinghorst.

Company CEO Elon Musk said the option "was causing too much confusion", and on Tuesday revealed that a required upgrade to a Tesla-designed computer chip for the system is still about six months away. But Musk said a "truer cost of ownership" for the midrange version would be about $31,000, his estimate for discounting the cost of gas. That compares to the Model 3 Long Range which is priced at $54,000 and has a range of 310 miles.

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The mid-range Model 3s will be rear-wheel drive only, prompting some to wonder if the company was using software to limit battery capacity on existing RWD inventory in order to get it out of the door.

Tesla is promising deliveries in four to eight weeks.

Musk did hint that the cheapest Model 3 may arrive early next year, tweeting that shipping cars with partially filled battery packs was better than waiting until February.

The move could frustrate Tesla fans who put down a $1,000 deposit two years ago for what they believed would be a sleek electric sedan costing about $27,500 after tax incentives. On that page, customers can choose one of three versions of the Model 3 - the top-of-the-line performance version, the long-range battery one, and the new midrange battery variant. While he has yet to deliver on that sticker price two and a half years later, demand has been strong, with sales rivaling some of the top-selling passenger cars in the U.S. last quarter. But in the meantime, the electric-car maker is taking orders for a mid-range battery Model 3 that's edging closer to that sticker price.

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".

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