Tesla cut the price of its most affordable car, the Model 3, by $1,100 making the new starting price $42,900.
That’s still a long way from the $35,000 price tag that Tesla CEO Elon Musk promised when the Model 3 was first unveiled in 2016. Still, Musk boasted on Twitter Wednesday that the luxury sedan really does now cost $35,000 after factoring in incentives and all the money drivers will save on fuel.
Reminded by a Twitter user about that promised purchase price, Musk replied: “We’re doing everything we can to get there. It’s a super hard grind.”
This is the second time Tesla (TSLA) has cut prices in recent weeks. At the beginning of the year, Tesla (TSLA) announced a price cut of $2,000 on all its models to help offset the partial loss of federal income tax credits for Tesla (TSLA)’s electric vehicles. The tax break started phasing out this year for Tesla (TSLA)s after the car maker hit the 200,000 vehicle limit for eligibility late last year. The credit, which phases out in steps, was reduced by half – from $7,500 to $3,750 – beginning January 1. It will drop by half again in July.
Tesla recently announced job cuts as it worked to save money amid product price cuts.
This latest price drop comes after Tesla ended its customer referral program on February 2. Under that program, Tesla owners could earn prizes by referring new customers to the brand. Depending on the number of people referred, prizes included cash, racing a Tesla Semi on a test track, driving a Boring Company tunnel digging machine or discounts on a new Tesla Roadster.
Musk has said recently that he expects to be able to produce the Model 3 for $35,000 in the next few months. In the meantime, the company is also coming closer to unveiling its next new product, the Model Y crossover, which will be based on the Model 3’s engineering.