Tesla Announces Mid-Range Model 3 Sedan, But Price Point Is Higher Than Promised

Electric-car manufacturer Tesla Inc. (NASDAQ: TSLA) has started taking orders for a mid-range battery Model 3 that can travel 260 miles (418 kilometres) between charges.

Analysts and investors had been waiting for Tesla to move forward with its long-promised short range Model 3. However, the orders now being taken for the Model 3 have the price point for the vehicle set at $45,000 U.S., about $4,000 less than the starting price of the sedan that went on sale last year, but still higher than the $35,000 U.S. version of the Model 3 sedan that Tesla has promised.

While Tesla is making the Model 3 more accessible to car buyers, the starting price for its sedans with the long-range batteries is increasing to as much as $54,000 U.S. The longer range Tesla vehicles can travel 310 miles (500 kilometres) on a single battery charge and have faster top speeds.

Tesla Chief Executive Officer Elon Musk unveiled the Model 3 to great fanfare in March 2016, pledging that it would start at $35,000 U.S. before incentives. Within days, the company had more than a quarter million orders for the vehicle.

However, Tesla has yet to deliver on that sticker price, even though demand for the Model 3 has continued to be strong. Musk has since said that shipping a $35,000 U.S. iteration of the Model 3 sedan right away would "cause Tesla to lose money and die." The long-awaited price point of $35,000 U.S. is likely still a few months away, Musk said in a Tweet Thursday.