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Musk has often shared that his strategy for Tesla was to build higher-priced cars – the Model S and X – whose success would ultimately usher in a $35,000 mass-market car, followed by an SUV, the Model Y, which is currently in development. But customers who reserved the Model 3 at that lower price have waited nearly three years since Musk first promised it. An online-only sales strategy, along with other changes, would allow vehicle prices to fall by about 6 percent on average, Tesla said in a blog on its website bit.ly/2IHjLw4. Over the next few months, Tesla will wind down ‘many’ of its stores, while investing in its service system, it said father of the bride cufflinks gold.
Online-only sales represent a dramatic shift for the company that has prided itself on its boutique retail stores. In June 2017, Musk pledged to increase the number of stores, saying they had “barely touched the surface” of what was possible. As of the fourth quarter, Tesla said it recently opened 27 new locations, bringing its total of stores and service centers to 378. Thursday was the third time this year that Tesla lowered the price on the Model 3, which recently started at $42,900 father of the bride cufflinks gold.
The new $35,000 version has a top speed of 130 miles per hour (209 km per hour) and can go from zero to 60 mph in 5.6 seconds, Tesla said. For $2,000 more, Tesla offers a version with a range of 240 miles (386 km) and a top speed of 140 mph. A $35,000 Model 3 is a major shot in the arm for Tesla sales during a period of major challenges, including deliveries of the Model 3 to Europe and China and construction of a factory in Shanghai. “This is a game changer,” said Wedbush Securities analyst Daniel Ives. Since tax credits will continue to decline over 2019, “this is really exactly what the doctor ordered,” he said father of the bride cufflinks gold.
He warned, however, there could be “more speed bumps ahead,” if more sales volume exacerbates prior problems with deliveries and service to customers father of the bride cufflinks gold. Musk declined to answer a question on what the profit margins of the $35,000 vehicle would be, according to the New York Times. Gross margins on the car were above 20 percent in the fourth quarter. “The margin on the vehicle obviously is going to be very small if there’s any margin there at all,” said David Kudla, CEO of Mainstay Capital Management, which has a short position in Tesla..
As part of cost-cutting efforts, Tesla last month reduced its full-time headcount by 7 percent, following a similar cut of 9 percent to its workforce in June 2018. The price cut on the Model 3 comes three days after renewed tensions between Musk and U.S. Securities and Exchange Commission father of the bride cufflinks gold. The agency petitioned a judge this week to have Tesla’s CEO found in contempt of an October settlement between the parties. The SEC accuses Musk of having made material statements about production levels on Twitter without first having them vetted internally..