Tesla cut its Model 3 prices again

Tesla Model Y

Tesla Model 3 price gets cut again, now starts at $42,900

The move follows a US$2,000 price cut on all Teslas announced in early January to partially offset the reduction in the USA federal tax credit its vehicles were eligible for.

Tesla has cut the price of its Model 3 sedan again, bringing the cost of the cheapest variant down to $42,900 before account incentives and potential gas savings are taken into account.

Now, Tesla has updated its website to the new pricing which shows that once the federal tax credit of $US3,750 and a fuel savings (based on 10,000 miles and a cost of $US2.85 per gallon) are applied, U.S. drivers can buy the mid-range Model 3 for $US34,850 ($US49,049).

In a statement to FOX Business, a spokesperson for the electric-car maker attributed the price cut to the ending of the referral program, "which cost far more than we realized".

The electric vehicle maker, which has been cutting costs as it looks to turn in profits this year, is also ramping up the production of the Model 3 as it tries to make the sedan more accessible for mainstream auto buyers. Tesla said on Tuesday it had cut the Model 3 price by $1,100, following a cut of as much as $2,000 in January.

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"We're doing everything we can to get there [$35,000]", Musk wrote on Twitter after the latest price change. "It's a super hard grind".

Chief Executive Officer Elon Musk put an end to Tesla's referral program at the beginning of this month.

"Getting those costs down...is what allows us to lower price and become financially sustainable and achieve goal of environmental sustainability", Musk said.

Material from Reuters was used in this report.

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