Tesla begins offering leases for Model 3

Tesla Model 3. Matthew DeBord  BI

Tesla Model 3. Matthew DeBord BI

If you look at it another, the company is raising prices.

Tesla Inc (TSLA.O) on Thursday started leasing out its Model 3 sedan in the United States, in a financing option that would increase the electric vehicle maker's customer base.

Tesla announced major changes to its model lineup Thursday, especially the Model 3, in an effort to shore up sales. The same goes for the Model 3 Long Range in rear-wheel-drive configuration. Previously, Tesla planned to put a smaller battery pack in the basic model and a larger one in the Standard Plus, the spokesman said. "Between the cost cuts, waning demand for its vehicles and now making the US$35,000 Model 3 much harder to buy, the company is now quietly realising it has to play by the same rules as every other automaker". Tesla said it will begin delivering the cars this weekend.

Now, in the latest course correction, Tesla says it will end online sales of the long-awaited $35,000 version of its Model 3 sedan, its lowest-priced offering, and make other changes that will effectively raise the price of the auto for many customers.

According to Tesla's data, the Standard Plus outsold the $35,000 base vehicle by a ratio of 6:1.

The company adds anyone who decides to software-limit a Standard Range Plus to Standard Range specification can do so (at any time) and receive a refund for the difference in costs. "They'll eventually get the formula right".

Tesla shares rose 0.6% to $269.98 as of 08:50 Friday in NY, before the start of regular trading.

On its ordering website, Tesla's default options are for customers to make a US$3,000 down payment and spend a total of US$4,199 at signing of a three-year, 10,000-mile annual lease.

Lessees interested in a dual-motor Long Range Model 3 can easily find themselves with a $700 per month lease payment. Interestingly, Tesla said lease customers won't get the option to buy back their vehicles at the end of the term, because "with full autonomy coming in the future via an over-their-air software update, we plan to use those vehicles in the Tesla ride-hailing network", Tesla wrote.

Chief Executive Officer Elon Musk first talked about his vision of a Tesla shared-vehicle fleet when he unveiled his Master Plan Part Deux in July 2016. The stock is down about 19 per cent this year.

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