Impending Chinese tariffs were probably just the final nail in the coffin for standard range edition of the Model 3
This was an important week for Tesla $TSLA as it announced its sales for the third quarter of 2024. Thankfully, its sales were up at the electric car maker, but not in the way experts had predicted and that meant the company’s stock still isn’t doing great. While all that was going on, the automaker made another step that’s sure to irritate investors and buyers, it killed off its cheapest model.
As of this week, Tesla has taken the Model 3 Standard Range Rear-Wheel Drive model down from its website, reports Reuters. The car, which boasted up to 272 miles of range, started at $38,990 and was the company’s most affordable model:
The Model 3 Standard Range Rear-Wheel Drive, priced at $38,990, uses lithium iron phosphate (LFP) battery cells sourced from China.
The U.S. recently announced higher tariffs on Chinese imports, including a 100% tariff on EVs and 25% on EV batteries and key minerals.
Additionally, vehicles that contain Chinese-made components, such as LFP battery cells, are ineligible for the $7,500 federal tax credit provided by the government.
Tesla’s Model 3 Long Range Rear-Wheel Drive is now its most affordable offering in the United States, priced at $42,490.
The fact that the standard range edition of the Model 3 didn’t qualify for federal tax credits launched as part of the Inflation Reduction Act means that the impending Chinese tariffs were probably just the final nail in its coffin. Those tariffs are something that Tesla boss Elon Musk hasn’t been quiet about since they first emerged, with the CEO even going so far as to oppose such measures, I wonder why?
However, the demise of the budget-friendly Model 3 just shows the wide-reaching impact that the tariffs could have on America’s auto industry, with many businesses sourcing cheaper components from China to fit into their cars. It’s for this reason that experts recently warned that the impending tariffs could make buying new cars in the U.S. harder and more expensive.
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