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Tesla would ‘die’ if it made entry-level Model 3 now

Finances prevent company from making most affordable version


Elon Musk, outspoken Tesla CEO, has confirmed the company's precarious financial situation is the reason it can't build the entry-level Tesla Model 3 at the moment.

Responding to a question posed on Twitter by Ivaylo Ivanov, Musk replied, "Shipping min cost Model 3 right away wd cause Tesla to lose money & die".

"Need 3 to 6 months after 5k/wk to ship $35k Tesla & live," he concluded.

Clearly those interested in buying an entry-level Model 3 would like to have their cars sooner rather than later, but the timing of when these vehicles become available has a financial angle too.

Tesla is rapidly approaching its 200,000th EV sold in the US. When it reaches that milestone, the US federal tax credit of US$7500 ($9980) begins to slowly wind down over a number of quarters before disappearing completely.

The production version of the Tesla Model 3 was launched in the middle of 2017, and was announced in two guises: an entry-level variant retailing for US$35,000 ($46,500), and a Long Range model for US$44,000 ($58,500).

The entry-level model has a US EPA range of 354km, and a 0-60mph (0-97km/h) time of 5.6 seconds, while the more expensive Long Range version has a range of 500km, and a 0-60mph time of 5.1 seconds.

So far, the company has only produced the Long Range model, and has just announced even more expensive AWD and Performance versions of the Model 3.

The electric car company has struggled to meet demand, and its own production targets. At launch, the company forecasted it would be building around 10,000 per month by December 2017. It made just over 2000.

Since then the production rate has increased, but the automaker is still struggling to hit the 5000 vehicle per week mark, a target which has now been pushed back to beginning of July.

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