Tesla introduces a $45,000 Model 3 variant with a 260-mile range

Tesla introduces a $45,000 Model 3 variant with a 260-mile range

The new rear-wheel drive model sports a battery with an EPA estimated range of 260 miles, or 50 miles less than the packs found in the long range and performance Model 3s.

Tesla added a new electric vehicle to its lineup Thursday - well, sort of.

Tesla also confirmed that the $35,000 base model some customers may be waiting for will not be manufactured this year, meaning it won't get the $7,500 credit.

Instead, this new model, dubbed the Mid-Range version, sits between the entry-level (but still non-existent) Model 3 and the high-end Long-Range version.

Tesla unexpectedly announced a mid-range battery option for the Model 3, bringing the price of the vehicle down to $45,000 and completely changing the pricing structure. That's about $4,000 less than the starting price of the sedan that went on sale previous year, excluding incentives or options.

The Model 3 is a four-door compact sedan that can seat up to "five adults comfortably, and the word comfortably is the key", Musk said.

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The midrange Model 3 should be welcome news for those who can't afford to shell out upward of $60,000 for an electric auto.

Buyers of the Mid-Range Model 3 will only be able to opt for rear-wheel drive, as the dual-motor, all-wheel drive option is limited to the Long-Range and Performance variants. This will be provided for free to customers who already paid for Full Self-Driving. Basically, for $10,000 less, the standard battery model will only reduce the range by 60 miles.

While the cheaper version of the auto is significantly lower than the $54,000 base price for the all-wheel-drive version that Tesla has been selling, some bears are honing in on various drawbacks of the model, as well as citing a great level of uncertainty that still surrounds Tesla's first mass-market vehicle, promised at a baseline price of $35,000.

Tesla recently said to expect gross margins for the Model 3 to reach about 15% in Q3 and 20% in Q4, "predominantly due to continued reduction in manufacturing costs and to some extent an improving mix".

"Our new mid-range battery is being introduced this week in the U.S. and Canada to better meet the varying range needs of the many customers eager to own Model 3, and our delivery estimate for customers who have ordered the Standard Battery is 4-6 months".