Tesla Kills Sub-$40,000 Model 3 As It Reports Delivery And Production Increases

Tesla has axed the most affordable version of the Model 3 and has announced its production and delivery figures for the third quarter, revealing a moderate increase in output and sales.

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The Model 3 in question was known as the Standard Range Rear-Wheel Drive and was priced from $38,990. This means the cheapest Model 3 is now the Long Range Rear Wheel Drive, which starts at $42,490. While some customers may be disappointed at first, there appears to be more to the story.

Read: Tesla Model 3 Highland Burns While Charging, But Don’t Blame The Battery

You see, the Model 3 Standard Range Rear-Wheel Drive model used lithium-ion battery cells sourced from China. As such, it was not eligible for the $7,500 federal EV tax credit. By comparison, the Model 3 Long Range Rear-Wheel Drive has locally sourced battery cells and is eligible for the full tax credit, meaning it can actually be purchased for just $34,990, significantly undercutting the Standard Range model.

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Dropping this model came at the same time as Tesla released its production and delivery results for Q3. During the quarter, Tesla produced 469,796 vehicles and delivered 462,890. Of those models built, 443,668 were Model 3s and Model Ys, while the remaining 26,128 were the Model S, Model X, Cybertruck, and Semi. Frustratingly, Tesla does not break down results for these specific models. A total of 439,975 Model 3s and Model Ys were delivered over the same period compared to 22,915 examples of Tesla’s other models.

Total deliveries of 462,890 for the quarter represent a 6.4% increase compared with the same quarter last year. Likely, the arrival of the Cybertruck in the final weeks of 2023 has contributed to the delivery increases, although specific details for the electric pickup aren’t known, so it’s hard to know how much of a factor it was.

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