manufacturer, Tesla has revealed that it will be making cheaper Model 3s this
Recently, Tesla announced that they will be laying off about 7% of their
employees and the CEO of the company, Elon Musk disclosed that the reason for
the reduction was because the electric cars were still too costly for most
people. The company has decided to reduce cost and increase demand by producing
In 2016 when the company unveiled their first car, they promised to produce a
Model 3 that would cost only about $35,000. Three years later and customers are
yet to see the car. Presently, the cheapest Tesla Model 3 goes for $44,000. The
decision to cut down cost will allow the company to keep its promise of making
affordable electric cars.
According to Wedbush analyst Dan Ives, Tesla is, right now, focusing on the
European market. In December 2018, the company started giving European
reservation holders the option of configuring their Model 3 orders. With Europe
coming onboard in the first half of 2019, demand will most likely increase
paving way for the long-anticipated mid-range Model 3.
In the summer of 2017 when Tesla began to make Model 3 cars, the company’s CEO
stated that they would be producing 5,000 Model 3s per week. This was quite a
huge task for the company as they had to invest a lot towards the achievement
of this goal.
Towards the end of 2018, Tesla decided to channel their efforts towards
reducing costs and improving efficiency. This move seemed to pay off as their
third-quarter results turned out to be stronger than their previous records.
Speaking on whether Tesla will need to raise business funds in 2019, Ives said
that the electric automobile company may have to return to the markets for cash
as they are to pay two loans this year. Both loans amount to $1.5 billion and
the first is due in March, while the second is due in September.