(Bloomberg) – Tesla Inc. is reducing the price of its Model 3 sedan for the second time this year, this time citing the end of a customer referral program that was a more expensive incentive than the company realized.
All versions of the Model 3 will cost $ 1,100 less, reducing the initial price of the car to $ 42,900. The measure comes after a $ 2,000 cut in all the Teslas announced in early January to partially offset the reduction in the US federal tax credit for which their vehicles were eligible.
The Executive Director, Elon Musk, ended Tesla's referral program earlier this month. The company, which does not advertise traditionally, gave new customers months of free access to their network of superchargers if they were referred by a friend. The best references have won prizes as valuable as a next generation Roadster sports car.
Musk, 47, announced to employees last month that Tesla would reduce the number of employees by 7 percent, citing the challenges the company faces in making its vehicles affordable without compromising profitability.
"I want to be a broken record on this: it's the cost, the cost, the cost, the cost," the CEO said during Tesla's earnings call last week. "Reducing those costs (variable costs and fixed costs) is what allows us to lower the price and be financially sustainable and achieve our mission of environmental sustainability. We have to be absolute fans of this, there is no doubt. "
To contact the journalist in this story: Dana Hull in San Francisco at [email protected]
To contact the editors responsible for this story: Craig Trudell at [email protected], Anand Krishnamoorthy
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