Tesla has quietly discontinued its most affordable Model 3 variant in the U.S., a decision analysts view as astute. As of Wednesday, the Standard Range Rear-Wheel Drive Model 3, priced at $38,990, was removed from the electric carmaker's website, leaving the Model 3 Long Range Rear-Wheel Drive as the entry-level option at $42,490.
This move is believed to have been influenced by U.S. tariffs imposed on certain Chinese-made components. The discontinued Standard Range model utilized lithium iron phosphate (LFP) batteries sourced from China. Earlier this year, the U.S. government introduced a 100% tariff on EVs imported from China and a 25% tariff on batteries and essential minerals, making such vehicles ineligible for the $7,500 federal tax credit.
Dan Ives, a prominent analyst at Wedbush and a long-time proponent of Tesla, described this discontinuation as "a smart strategic move." He emphasized that this shift indicates a renewed focus on the Long Range Model 3. "The tariffs on Chinese EVs reflect growing tensions in the U.S.-China tech landscape, which ultimately benefits Tesla," Ives stated.
He further noted that the removal of the Standard Range model doesn't detract from Tesla's overall strategy, as the Model Y remains the company's primary focus in the U.S. market, starting at $44,990.
With increasing concerns about affordability among electric vehicles, Tesla has yet to release a more budget-friendly option, despite its long-standing promise to do so.
Tesla's decision to phase out the cheapest Model 3 variant coincided with its third-quarter performance, where it exceeded analysts' delivery expectations with 462,890 vehicles sold, representing a positive step toward realizing its ambitious goal of 1.8 million deliveries for the year.
Tesla 2024 Model 3 news from lwee@insider.com (Lian Kit Wee)
