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

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" Tesla has inched a bit closer to the Model 3's $35,000 promised base price".

Musk also said on the call that the standard, shorter range $35,000 Model 3 may be available in the middle of this year, clarifying that it was a "rough, rough guess", and that current production is nearly entirely earmarked for upcoming deliveries to Europe and China.

Now, Tesla has updated its website to the new pricing which shows that once the federal tax credit of $US3,750 and a fuel savings (based on 10,000 miles and a cost of $US2.85 per gallon) are applied, USA drivers can buy the mid-range Model 3 for $US34,850 ($US49,049). 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.

The latest quarterly report suggests Tesla is making progress in lowering production and component costs for the Model 3, slashing man-hours required to build each unit.

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The price drop is another in a series of reductions made by the EV maker, the last of which occurred in the new year when Tesla's United States federal tax credit was reduced by half from $US7,500 to $US3,750.

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.

"Model 3 starting cost now ~$35k (after ~$8k of credits & fuel savings)", Musk tweeted on Wednesday. "It's a super hard grind", he wrote.

Chief Executive Officer Elon Musk put an end to Tesla's referral program at the beginning of this month. Tesla said in a statement that ending the costly referral program allowed it to cut the Model 3 price.

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