Tesla knocks $1,100 off price of the Model 3

Elon Musk

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"Getting those costs down...is what allows us to lower price and become financially sustainable and achieve goal of environmental sustainability", Musk said.

Still waiting for that $35,000 Tesla Model 3?

Musk told a Twitter user that the company is "doing everything we can" to drop the Model 3 base price to $35,000, without credits.

The incremental reductions in price are the result of a war Tesla's team is waging on bringing costs down. "It's just like people literally don't have the money to buy the vehicle", Musk during the company's earnings call last week.

In Colorado, drivers travelling an average of 12,000 miles (a conservative value that is less than the state's average 13,443 annual miles) and accessing the state's $US5,000 incentive can essentially buy the mid-range Model 3 for under $US30,000 ($A42,220). The automaker has been picking away at costs through simplifying the lineup - the Model S and Model X will now only be offered with a 100-kWh battery, locked by software for some buyers - while also eliminating some options on the Model 3. CEO Elon Musk says the Model 3 must be competitive with gasoline-fueled cars for the company to succeed.

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.

In a statement to FOX Business, a spokesperson for the electric-car maker attributed the price cut to the ending of the referral program, "which cost far more than we realized".

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