Tesla is no longer selling its popular and most affordable Model 3 compact sedan in the U.S. This comes as the electric carmaker reported a smaller-than-expected rise in third-quarter deliveries.
Tesla removed the Standard Range Rear-Wheel Drive Model 3 version from its website as of Wednesday.
The model, priced at $38,990, used lithium iron phosphate (LFP) battery cells that were produced in China.
Due to the Biden administration's recent announcement of higher tariffs on Chinese imports — including a 100% tariff on electric vehicles (EVs) and a 25% tariff on EV batteries and key minerals — importing these components has reportedly become costly, Reuters reported.
Although the government offers tax credits for EV purchases, vehicles with Chinese-made components, such as LFP battery cells, are ineligible for the $7,500 tax credit.
Now, Tesla's Model 3 Long Range Rear-Wheel Drive is the most affordable, with a price of $42,490. This costs $3,500 more than the Standard Range. The price gap is not considered huge since consumers enjoy 363 miles of range when it is fully charged, as opposed to the discontinued Standard Range that only runs for 272 miles on full charge.
Tesla on Wednesday reported a smaller-than-expected increase in vehicle deliveries for the third quarter of 2024, indicating incentives and financing deals didn't attract customers, resulting in a more than 6% drop in its stock price.
Reuters reported Tesla delivered 439,975 Model 3 and Model Y vehicles and 22,915 units of other models, including the Model S sedan, Cybertruck and Model X premium SUV. The company produced 469,796 vehicles during the July-September period.
Over the past few years, Tesla has frequently adjusted its prices — both increasing and decreasing— in its bid to retain its leading position in the market. Despite these efforts, an increasing number of customers have shifted to other brands, which has led to declining sales year after year.
Aside from Model 3, Elon Musk's company also discontinued other models, often without notice. Earlier this year, the company stopped selling the $61,000 RWD Cybertruck and the cheapest version of Tesla's angular EV truck.
While the Standard Range Model 3 is no longer available for order, reports suggest that Tesla is still developing a more affordable vehicle, which could either be a new model or an updated version of the Model 3, according to the Verge.
