Tesla added a new electric car to its lineup Thursday — well, sort of.
The new Model 3 version, with a 260-mile range, is priced at $45,000 before state and federal incentives, as Electrek first reported. Tesla's website factors in both incentives and expected gas savings, which puts the cost under $30,700 in California.
Costs $35k after federal & state tax rebates in California, but true cost of ownership is closer to $31k after gas savings— Elon Musk (@elonmusk) October 18, 2018
A notice on Tesla's website previously stated that October 15 was the cut off date for orders to receive the full federal tax credit.
Along with the mid-range option release, Tesla has altered its entire pricing structure for the Model 3 — both of which were unexpected.
When the more affordable Tesla sedan launched last year, pricing started at $49,000 for 310 miles of range, which was well above the $35,000 long-range EV the company promised. Tesla has been focused on ramping up production to fill those higher-priced orders.
Meanwhile, many reservation holders are still waiting for the $35,000 version to come to market. CEO Elon Musk recently noted that focusing on the cheaper car first would cause Tesla to "die," because it's not profitable to make.
With today's announcement, Tesla has come through with lower pricing, but $45,000 before incentives is the starting point. A dual-motor, all-wheel-drive version with a long-range battery (310 miles) starts at $54,000. The "performance" version of the dual-motor, all-wheel Model 3 starts at $64,000.
Tesla is promising deliveries in four to eight weeks. The Mid Range Battery option for the Model 3 is based on the same architecture as the Long Range Battery, just with fewer cells, which makes that timeline possible.
Notably, the Tesla website no longer allows customers to order "Full Self Driving" capabilities. That could be for regulatory reasons, but it's currently unclear.
Update: Tesla responded to GTM's inquiry noting that the Full Self-Driving option is still available by request for those who wish to purchase it, and that all Tesla cars still come standard with Full Self-Driving hardware, which can be updated over-the-air when future functionality is available. Tesla said the option was removed from the "Design Studio" for now in order to streamline our purchase experience for customers.
GTM also asked about Tesla's gas savings calculation on the new website, which appears to show even greater savings than in the past. The company responded simply that owning an electric vehicle is fundamentally less expensive than owning a gas-powered car when looking at the total cost of ownership.
Tesla issued the following statement to Electrek in response to the new Model 3 pricing:
"As Model 3 production and sales continue to grow rapidly, we’ve achieved a steady volume in manufacturing capacity, allowing us to diversify our product offering to even more customers. Our new Mid-Range Battery is being introduced this week in the U.S. and Canada to better meet the varying range needs of the many customers eager to own Model 3, and our delivery estimate for customers who have ordered the Standard Battery is 4-6 months.”
A company spokesperson told GTM Tesla is also extending its Premium Black and White Interior as an option for Model 3 Mid Range Rear-Wheel Drive vehicle, which was previously only available with the Dual-Motor variants (All-Wheel Drive and Model 3 Performance).
Tesla supporters will likely see today's news as a positive development. 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.
This change could put the Model 3 in an affordable price range for a number of customers — at least while incentives last. 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 (because the company has already hit the 200,000-unit tax credit limit).
But the new pricing structure also raises questions about the compromises Tesla has to make in order to hit the $35,000 mark. Company critics are already casting doubt on the change, claiming it points to soft Model 3 demand.
Tesla said that its Standard Battery Model 3 option has a unique battery architecture that is not yet in production. However, the delivery estimate for customers is four to six months.
This story was updated with additional information from Tesla.