Tesla introduces a $45,000 Model 3 variant with a 260-mile range

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That's about $4,000 less than the starting price of the sedan that went on sale past year, excluding incentives or options.

Tesla chief Elon Musk said late Thursday that the automaker was preparing to sell the cheapest version yet of its newest electric auto, the Model 3, signalling an attempt to get back to business after months of controversy. It is not clear how numerous more than 400,000 reservations for the Model 3 are for the base models.

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While the long-range Tesla battery pack takes the auto 310 miles on a charge, the mid-range Model 3 battery has a range of 260 miles. Any new Tesla delivered after January 1st 2019 (but before July 1st 2019) is only eligible for a $3,750 IRS credit. 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 (given the company has already hit the 200,000 unit tax credit limit).

The Model 3 is a four-door compact sedan that can seat up to "five adults comfortably, and the word comfortably is the key", Musk said.

Tesla's Model 3 was originally supposed to be the company's mass-market offering, with prices starting at $35,000 before incentives.

This has been achieved by moving the front seats forward since there is not engine taking up space between the front wheels thus ensuring best-in-class front and rear-seat legroom.

As for the actual $35,000 Model 3, the auto will be referred to as the Model 3 Standard Range and should have 220 miles of range. Within days, the company had more than a quarter million reservations.

Tesla shares rose 1.3% to $267.43 in German trading compared to the previous day's U.S. close as of 10:45 a.m.in Frankfurt.

The cheaper "standard-range" Model 3 is still absent from the new, simplified ordering page, and the company has made no secret of the fact that it can not afford to lose money selling the cheaper cars, no matter the demand.

However, Tesla is promoting the auto as costing as little as $30,700 by factoring in "gas savings" and all possible federal and local electric vehicle tax incentives (but not the destination charge).

To get the Mid Range into production quicker than previously anticipated, Tesla uses the same battery as the Long Range but packs it with fewer cells.

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