Tesla increases 'midrange' Model 3 price — days after car was announced

Tesla has increased the price for its new midrange rear-wheel-drive Model 3 sedan launched just last week by $1,000 to $46,000, according to the company's website.

The electric carmaker surprised markets by announcing the new version, which promises a 260-mile range, on Oct. 18 in a move that came as U.S. tax breaks for Tesla cars are about to decrease.

Tesla is scheduled to report quarterly results after market close on Wednesday.

Tesla delivered 55,840 Model 3s in the third quarter, worth more than $3 billion in revenue at an average of $59,000 per car. That's a rise from $1 billion in the second quarter.

More sales of the higher-priced versions of the Model 3, which carry fatter margins, will help profitability. The all-wheel drive and performance versions help get Tesla closer to its goal of third-quarter Model 3 margins of 15 percent, with 20 percent margins expected for the fourth.

But the phase-out of the federal tax credit for Teslas stands to hurt business, just as other automakers are bringing EVs to market with their tax credits intact. So Tesla introduced the mid-priced model last week in an attempt to stimulate sales before the credit drops from $7,500 to $3,750 on Jan. 1.

Elon Musk and Tesla could face questions about whether they will ever introduce the long-promised $35,000 version of the Model 3, which Bernstein analyst Toni Sacconaghi said was a double-edged sword: If Tesla doesn't, some customers will be angry, and if it does, margins likely will be further pressured.

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