Tesla cuts Model 3 price for second time this year

Tesla Inc said on Wednesday it was lowering the price of its Model 3 sedan by $1,100, after the electric carmaker ended its costly customer referral program.

The second price cut this year brings down the cost of its least expensive variant to $42,900, according to the company`s website. 

The cost would drop to about $35,000, after about $8,000 of credits and fuel savings, Chief Executive Officer Elon Musk tweeted.

In a reply to a Twitter user on when Tesla would drop the Model 3 base price to $35,000, without credits, Musk said, "We`re doing everything we can to get there. It`s a super hard grind." 

Tesla, which does not use traditional advertising and marketing, introduced its customer referral program in 2015, but discontinued it on Feb.1.

The program had evolved over the years and in its latest version, Tesla`s personal referral codes gave new buyers six months of free supercharging and prizes for existing owners such as launching personal photos into deep space or invites to a Tesla event.

Tesla delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut prices for all its vehicles in the United States to offset a reduction in a green tax credit.

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The company is rapidly ramping up production of its Model 3 sedan and lower prices could help it reach a broader customer base than its pure luxury vehicles.

When asked about lower prices in Europe, Musk tweeted that the value added tax of about 20 percent and import duties of about 10 percent usually result in a 30 percent higher cost in Europe.