Tesla delivered news Thursday that many consumers have long awaited: The automaker is finally offering a version of the Tesla 3 sedan priced at $35,000. To trim costs, the automaker is also closing most of its retail stores as it shifts sales of its electric cars to online orders.
The announcements were previously hinted at on Twitter by Tesla CEO Elon Musk, whose tweets on the social network recently landed him in legal trouble with regulators. Trading in Tesla’s stock was briefly halted pending the announcements that Musk said were coming.
Tesla introduced the Model 3 in 2017 as a more affordable way for consumers to purchase its electric cars. At the time, Musk promised the basic model of the car would eventually retail with a base price of $35,000. Tesla said Thursday that Model 3s at that price point would have a top speed of 130 miles an hour and accelerate from 0 to 60 mph in 5.6 seconds. More expensive versions of the Model 3 will have faster speeds and more power.
In a move that is perhaps more significant for Tesla customers, the company is closing many of its retail stores worldwide, leaving only a handful of “galleries” in high-traffic locations. Instead, Tesla sales will become “online only,” allowing the company to “lower all vehicle prices by about 6% on average,” Tesla said in a statement.
Tesla’s stock closed official trading up 1.6% at $319.88 a share, before the announcement. Once trading resumed after hours, Tesla shares were down 4% at $306.80 a share following news of the store closings. The company’s statement attempted to put a positive spin on the cost-cutting measure.
“You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide,” Tesla’s statement said. “We are also making it much easier to try out and return a Tesla, so that a test drive prior to purchase isn’t needed. You can now return a car within 7 days or 1,000 miles for a full refund. Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free.”
Earlier this week, Musk hinted on Twitter about “some Tesla news” coming on Thursday, stirring anticipation about the announcements while also evidently tweaking the Securities and Exchange Commission, which this week asked a judge to hold Musk in contempt for tweeting out production targets for Tesla cars. Tesla appointed an in-house lawyer to monitor Musk’s Twitter feed, which prompted Musk to temporarily change his account name to “Elon Tusk” as he tweeted about Thursday’s pending announcement.
Musk’s use of Twitter, unorthodox by the standards of most CEOs, drew exactly the kind of wry responses you’d expect from Musk followers on Twitter.