Tesla pulls brakes on cheapest $35,000 Model 3 car

The electric car-maker Tesla has pulled the brakes on its cheapest $35,000 Model S, which will be replaced by the new 2021 Model 3 models for which the price is yet to be announced.

Electrek reports that Tesla has decided not to sell the $35,000 version of its Model 3 altogether.

“Sources familiar with the matter told Electrek that Tesla informed its staff that they weren’t allowed to ‘downgrade’ new 2021 Model 3 vehicles to ‘Standard Range’ and sell them for $35,000,” the report mentioned on Monday.

The Elon Musk-run company in 2019 launched the Model 3 Standard Range version for $35,000 — delivering on a promise made long ago.

“However, the electric carmaker moved away from the product just a few months after launching it”.

It stopped listing the $35,000 version of the Model 3 or even producing it.

They, however, kept selling a Model 3 Standard Range Plus (now $38,000).

“Given the popularity of the Standard Plus relative to the Standard, we have made the decision to simplify our production operations to better optimize cost, minimize complexity and streamline operations,” Tesla had said in a statement.

“As a result, Model 3 Standard will now be a software-limited version of the Standard Plus, and we are taking it off the online ordering menu, which just means that to get it, customers will need to call us or visit any one of the several hundred Tesla stores”.

The Model 3 was originally touted as Tesla’s first car for the mass market.

S&P 500 index inclusion

Tesla will be added to the S&P 500 index on Dec. 21. Based on its market value Monday, the electric car maker would be one of the top 10 companies in the benchmark index upon entry.

S&P Dow Jones Indices made the announcement after the closing bell. Tesla shares jumped nearly 14% in after-hours trading.

Tesla became eligible to join the S&P 500 after posting its fourth consecutive profit in the second quarter of this year. However, it was not selected for inclusion in the index in September by the index committee at S&P Dow Jones Indices.

Tesla shares have soared 387.8% this year as the company is finally making money on a consistent basis after years of losses and continues to hit milestones for deliveries of its vehicles. Tesla earned $331 million in the third quarter on revenue of $8.77 billion.

The company, led by Elon Musk, has a market value of $386.83 billion as of Monday’s close. That would make it the tenth most valueable company in the S&P 500.

S&P Dow Jones Indices said Tesla will be one of the largest companies added to the S&P 500 in the past decade. The company said it is considering adding Tesla in two stages on Dec. 14 and 21.

The company Tesla is replacing in the S&P 500 will be announced at a later date, S&P Dow Jones Indices said.