Tesla CEO Elon Musk is finally rolling out the electric automaker’s flagship Model 3 car at a price tag of $35,000.
Musk has long touted the Model 3, unveiled in 2017, as an affordable option for drivers looking to go electric. But Tesla, which is counting on the vehicle to help it crack the mass market and drive growth, has struggled to deliver on that pricing pledge. A survey last summer pegged the average price for a Model 3 price at more than $59,000.
Consumers can now order the lowest-cost Tesla with a standard interior and 220-mile battery back, with deliveries starting as soon as next month. A Model 3 with a range of 240 miles is available for $37,000.
Tesla said it is changing its sales practices around the globe to help lower the Model 3’s base price and will only allow people to make purchases online. That shift will entail closing most Tesla stores, resulting in an undisclosed number of layoffs.
“You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide,” the company said in a post on its corporate blog.
Tesla prefaced Thursday’s announcement by redirecting those looking to place orders for a Model 3, Model S or Model X to a webpage, which stated “The Wait is almost over. Great things are launching a 2 p.m.”
Some Wall Street analysts said the lower-cost Model 3 will boost Tesla and enhance its appeal to investors.
“In our opinion this announcement is a potential game changer for Musk and Tesla as the [$35,000] vehicle at profitable margins is a linchpin to the bull thesis in the name and we view this news as a major step forward,” Wedbush analyst Daniel Ives said in a note.
Tesla expects to turn a profit in the second quarter.
Tesla shares closed up 1.6 percent on Thursday, at $319.88 but fell 3.5 percent in after-hours trading after its announcement. The stock price is particularly important given the company has a billion-dollar debt payment due next month.
About $920 million in convertible senior notes expires March 1 at a conversion price of $359.87 a share. If Tesla shares remain below that price, the automaker must pay the debt in cash, potentially wiping out almost a third of the $3 billion Tesla reported holding at the end of its September quarter.
That debt payment isn’t the only distraction for Tesla.to show a federal judge why he should not be held in contempt of court after the U.S. Securities and Exchange Commission said he had violated a settlement agreement with the agency.
The Tesla CEO’s tussle with the SEC comes nearly five months after he settled an SEC fraud suit that claimed he misled investors by tweeting his plans to take the company private.