Tesla cars recharge at a Tesla Supercharger facility on January 30 2019 in Petaluma, California. Picture: GETTY IMAGES/AFP/ JUSTIN SULLIVAN
Tesla cars recharge at a Tesla Supercharger facility on January 30 2019 in Petaluma, California. Picture: GETTY IMAGES/AFP/ JUSTIN SULLIVAN

Bengaluru — Electric-car maker Tesla said on Wednesday it was lowering the price of its Model 3 sedan by $1,100, citing the end of a costly customer referral programme.

The second price cut in 2019 brings down the cost of its least-expensive variant to $42,900, according to the company's website.

The starting cost of the Model 3 is now about $35,000, after about $8,000 of credits and fuel savings, Tesla CEO Elon Musk tweeted.

In a reply to a Twitter user asking Musk when Tesla would drop the Model 3 base price to $35,000, without credits, he said, "We're doing everything we can to get there. It's a super hard grind."

Tesla ended its customer referral incentive plan on February 1 after Musk tweeted that the referral programme was "adding too much cost to the cars, especially Model 3".

Tesla delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut prices for all its vehicles in the US to offset a reduction in a green tax credit.

The company is rapidly ramping up production of its Model 3 sedan and lower prices could help it reach a broader customer base than its pure luxury vehicles.

When asked about lower prices in Europe, Musk tweeted that the value added tax of about 20% and import duties of about 10% usually result in a 30% higher cost in Europe. 

Reuters