Tesla Inc. (NASDAQ:TSLA) has recently announced that it will no longer be providing its entry-level $35,000 model 3 for online purchases. Customers will now have to purchase the car through telephone or in stores. This news comes weeks from the launch of the model 3 that is supposed to be a mass-market version of the much famed electric car.
CEO of Tesla Motors, Elon Musk, announced 10 days ago that Tesla would be shutting down showrooms and focusing on online sales. This recent news is a complete about-face from their prior sales strategy. According to the Tesla website, the company explained, “We’re making these changes to ensure that our online order process is focused exclusively on the three Model 3 variants customers want most.”
Tesla also has announced that it will be raising prices on this model as well as providing lease options. The new model 3 will now be priced at $39,500 with Autopiloted feature included. This is a change from the prior disclosed price of $35,000. US customers will also be able to lease the car with 10,000, 12,000 and 15,000-mile annual usage options. This is the first time that Tesla is allowing this option but there is one major catch, no customers will be allowed to purchase the car once the lease expires.
The reason for the lack of upgrade to buy option for leases is probably due to to the purported self-driving ride sharing strategy that Tesla plans on implementing. Elon Musk explained that the “Tesla will operate its own ride-hailing services and compete directly with Uber and Lyft, obviously,” according to interview with CNBC.
Last week, Tesla announced that its quarter to quarter sales were at its lowest in the history of the car maker. Sales for the first quarter were 31 percent less than the previous quarter. The model 3 will play an important role for Tesla to meet its annual sales target.