Tesla stock down 3% after releasing $35,000 Model 3 car
Tesla releases its long-awaited and more affordable Model 3 sedan.
Tesla is finally releasing the $35,000 Model 3 sedan. The car was promised to be offered at that affordable price since 2016. Chief executive officer, (CEO), Elon Musk, made the announcement after a week of mysterious tweets. Shares dropped 3% in US afterhours trading after Musk said the company won't be profitable in Q1.
Why did Elon Musk say it would be hard for Tesla to make a Q1 profit?
Though Musk wanted to make the more affordable car, he said that Tesla’s Q1 earnings may be less because of the sacrifices made for the Model 3.
‘It is excruciatingly difficult to make this car for $35,000 and still be financially sustainable,’ said Musk.
How is the Model 3 affordable at $35,000?
The new Model 3 car was able to be more affordable than its current $44,000 because of many changes Tesla made. The car company will only have online sales of its vehicles. The corporation made the announcement in a blog post.
‘You can buy your car on your phone in about one minute in the US. The important thing for customers in the United States to understand is that, with online sales, anyone in any state can quickly and easily buy a Tesla,’ promised Tesla in the post.
‘Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected,’ noted the company.
Tesla was also able to make the $35,000 Model 3 because the vehicle company is closing stores.
‘Over the next few months, we will be winding down many of our stores, with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers,’ wrote the company.
What features will the new Model 3 have?
The Standard Range base model can accelerate from 0-60 miles per hour(mph) in five seconds. The Model 3 can also go up to 130 mph. Musk praised the car and said there will still be tax credits for customers.
‘It’s an incredible car, and at $35,000 there are still some pretty significant consumer tax credits that can be had,’ said Musk.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
