Amid losing a tax credit that made its cars more affordable to buyers in the U.S., Tesla has today announced that it is cutting the price of its Model 3 sedan for the second time this year, Reuters is reporting.
The electric car maker, which has been cutting costs as it looks to turn in profits this year, is also ramping up the production of the Model 3 as it tries to make the sedan more accessible for mainstream car buyers.
A U.S. federal tax credit began phasing out for Tesla in January, effectively raising the price of cars by $3,750. Tesla said on Tuesday it had cut the Model 3 price by $1,100, following a cut of as much as $2,000 in January.
That leaves the starting price of a Model 3 at $42,900, still substantially above the $35,000 price Tesla Chief Executive Officer Elon Musk originally promised.
In reply to a recent tweet, CEO Elon Musk noted the company is doing everything it can to drop the Model 3 base price to $35,000, without credits. “It’s a super hard grind,” Musk tweeted.
Tesla has previously said in a statement that that ending the costly customer referral program has allowed it to cut the Model 3 price. The program, that ended at the beginning of February, gave new buyers six months of free charging as well as prizes for existing owners.
A Tesla Model 3 currently starts at $58,600 CAD for the Mid Range Battery, Rear-Wheel Drive model in Canada. The Long Range Battery dual-motor all-wheel drive model costs $67,900 CAD, while the Performance model of the latter costs $83,300 CAD, before incentives in BC ($5000) and Quebec ($8000).