Tesla’s ending of the customer referral program last month was not in vain as buyers of the Model 3 will now be able to save more than a thousand dollars on their purchase.
According to CNBC, the price of the Model 3 has been reduced by $1,100. It will now cost $43,000 to drive off in, or take delivery of, the entry-level electric car. After credits and fuel savings it will be around $35,000, per Tesla CEO Elon Musk.
This is the second time that Tesla is cutting the prices of the Model 3 sedan this year. After the green tax credit was reduced the electric carmaker cut the prices of all its vehicles in the U.S.
The reduced prices of the Model, however, only apply in the United States. When asked whether the discount will be enjoyed by customers in Europe, Musk pointed out that import duties and value-added tax would still make buying the Model 3 in Europe 30% more expensive.
As previously reported by CCN, the electric car maker’s customer referral program was scrapped on February 1. The announcement was made on January 17.
At the time Musk argued that the program was adding unnecessary costs to its vehicles especially the Model 3. One of the complaints that had been leveled against the customer referral program included the abuse of ‘good faith’.
This was because some Tesla owners were promoting their referral codes not just on social media but by purchasing ads. The program’s closure did not come as a surprise as Musk had indicated the intention to do so in 2017.
While it is not clear whether the Model S and the Model X will get similar savings, it is not a secret that Tesla’s biggest priority right now is the Model 3. This year the electric carmaker expects Model 3’s volumes to increase significantly as production rates improve at its Fremont plant.
Additionally, Tesla expects to start producing the Model 3 at the newly-announced Shanghai factory by the close of 2019.
So far Model 3 has managed to score several firsts in the United States as Tesla noted in its most recent earnings release:
Thanks to the hard work and ingenuity of our manufacturing teams, by mid-2018 we successfully overcame these challenges and stabilized Model 3 production at high volumes. Model 3 then went on to become the best-selling passenger car in the US in terms of revenue in both Q3 and Q4. With nearly 140,000 units sold, Model 3 was also the best-selling premium vehicle (including SUVs) in the US for 2018 – the first time in decades an American carmaker has been able to secure the top spot.
Recently, product testing and review nonprofit, Consumer Reports, ranked the Model 3 as the most satisfying car to own. The Model 3 managed to beat Porsche 911 (2nd on the list) and even stablemate Model S (5th).
The announcement regarding reduced prices for the Model 3 could boost Tesla’s stock price when the market opens. This would be especially so if there are firm indications that it will spur more vehicle sales. Currently, the stock is trading at slightly above $320.
This is an appreciation of over 13% since it fell slightly below $283, its lowest level in 2019.