Tesla cuts Model 3 price for the second time this year

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The electric vehicle company now says on its website that the auto starts at US$42,900, still a ways from its goal of lowering the base price to US$35,000.

Tesla has lowered the price of its Model 3 by $1,100 amid reports that USA sales fell precipitously in January despite a $2,000 reduction that went into effect at the beginning of the month.

If you go to Tesla's order page for the Model 3, you'll see the cheapest, rear-wheel drive with a mid-range battery starting at $34,850.

The federal electric vehicle tax credit, which lowers the cost of a Tesla, dropped to $3,750 in January and will be halved again this summer before disappearing completely in 2020.

"The demand for - the demand for Model 3 is insanely high".

The latest quarterly report suggests Tesla is making progress in lowering production and component costs for the Model 3, slashing man-hours required to build each unit.

Musk told a Twitter user that the company is "doing everything we can" to drop the Model 3 base price to $35,000, without credits. The federal credit is now US$3,750, but that expires at the end of the year. Tesla said in a statement that ending the costly referral program allowed it to cut the Model 3 price. "It's a super hard grind", he wrote.

Questioned by another follower as to how this would affect European prices - the first shipment of Model 3s having just arrived in Europe as of Tuesday - Musk responded that Value-Added Tax and import duties would result in a 30% higher price.

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