Entry-level Tesla Model 3 goes on sale in US for $35,000

The long-awaited ‘entry-level’ Tesla Model 3 has now gone on sale in the USA, with a US $35,000 (£26,000/Rs 24 lakh) starting price and a 220-mile (354km) range – at the same time as the firm has moved all of its sales online only.

Company boss Elon Musk has long promised that the electric saloon would eventually be offered in a Standard-spec, and it is now available to order on the company’s website, along with a new mid-range ’Standard Range Plus’ model designed to bridge the gap to the current mid-range, long-range and Performance models.

Musk said the standard Model 3 was “an incredible car”, citing a top speed of 130mph (209kph) and a 0-60mph (0-100kph) time of 5.6s. He noted that it met the same safety standards as the existing car. The car doesn’t come with Tesla’s full Autopilot driver assistance systems, but Musk said buyers will be able to upgrade their cars at a later date.

The standard interior comes with cloth seats and an infotainment system, with Musk calling the interior “slightly better” than that originally promised. Musk added that all cars would now feature a panoramic glass roof as standard.

The Standard Range Plus, which will cost $37,000 (£28,000/Rs 26 lakh), features 240 miles (386 km) of range, a 140mph (225 kph) top speed, and a 0-60mph time of 5.3secs. 

The two new Model 3 variants are available to buy now in the USA, with international sales set to start in around three to six months. Tesla recently started overseas deliveries of the Model 3 to Asia and Europe, although right-hand-drive versions have yet to be produced for sale in the UK.

While announcing the new models, Musk also revealed that it will now only offer its cars for sale online. Musk says it will be possible to order a car using a smartphone in under a minute. The company will offer a full refund within one-week or 1000-miles, allowing customers to try them and return without penalty, a concept Musk said could partly replace traditional test drives.

Musk confirmed that some Tesla stores would close and some jobs would be lost, but said most stores would become showrooms and galleries to showcase the products and guide customers through the buying process. Musk said the job cuts were necessary to reach the $35,000 (Rs 24 lakh) price target, saying: "There’s no other way for us to achieve the savings required for us to make this car and be financially sustainable."

Musk added that the $35,000 price tag was "the lowest we could possibly sell this car." He added: "It’s excruciatingly difficult to make this car for $35,000 and be financially sustainable." Pressed on whether Tesla would ever offer a cheaper machine, he said: "Will there be future models that cost less? Yes, but they won’t be soon. At least two to three years, closer to three years."

The surprise confirmation of the entry-level Model 3 comes as several major cars firms are preparing to launch their own full electric cars. Volvo sub-brand Polestar recently launched the Polestar 2 five-door fastback, with a sub-£35,000 ($46,400) guide price, 402bhp powertrain and 311-mile range, with company bosses referring to it as a direct Model 3 competitor. Volkswagen is also gearing up to launch the ID hatch later this year, the first model on the VW Group's new MEB platform.

In addition, Tesla is launching a software upgrade for all existing and future Long Range rear-wheel-drive Model 3s, which will increase their range to 325 miles. The Model 3 Performance will get a 7mph increase in top speed to 162mph.