Elon Musk has been teasing something big recently. Changing his twitter name from Elon Musk to Elon Tusk, the eccentric CEO made reference to a big announcement on Thursday afternoon. Understandably, speculations have run wild, with many going so far as to predict he would be stepping down from his role as CEO.
Not surprisingly, these rumors and anticipations were false, as most people who know the man would be surprised to see him turn over the reigns to another person. Instead, Tesla revealed this afternoon the announcement of it’s long-anticipated $35,000 Model 3.
While the automaker has long promised a pared-down version of its regular Model 3 sedan, the company finally announced more than a year after first producing the new model that the reduced price point variant is no available.
However, Elon Musk went on to mention that they will have to close stores and lay off employees in order to financially be able to produce the cheaper car with it’s tighter profit margins, telling reporters that it’s “excruciatingly difficult” to make at the cheaper price according to CNN. The car will have 220 miles of range with a top speed of 130 mph as written in the company’s official blog post. Tesla also will be introducing a “Model 3 Standard Range Plus” version, which will boast an extra 20 miles in range and an extra ten mph to its top speed for an extra $2,000 before incentives.
Many experts in the auto industry have said that Tesla lowing its prices to make its cars more accessible would prove a necessary step if the company wanted to transition into becoming a truly mainstream automaker. Karl Braurer, a publisher at Autotrader and one such industry expert, went on to say that “Tesla’s biggest challenge going forward will be meeting production volumes and demand while maintaining timely service for a rapidly-expanding customer fleet,” Brauer said. “If Tesla can do this it will have successfully transitioned from a boutique automaker with a niche audience to mainstream brand serving mainstream consumers.”
While the announcement is seen as good for the automaker, Tesla previously suffered a setback when Consumer Reports withdrew its recommendation for the company’s Model 3 on the basis of reliability issues. Since then, Elon Musk has stated that the company has addressed much of those complaints. However, the damage to the car’s reputation has already been done and will take some time to return.
Musk’s cryptic Twitter message on Wednesday and the resulting speculation saw the company’s stock price increase 5 percent. Over the past couple of days, the price of Tesla has done up around 10 percent, although today’s after-hours trading has seen a good deal of that increase disappear.
Tesla Company Profile
Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles.
It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries. – Bloomberg