Tesla cut its Model 3 prices again

Tesla slashed the price of the Model 3 by $1,100, bringing the cost of its cheapest model down to about $42,900 before incentives, according to the company’s website.

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In a statement to FOX Business, a spokesperson for the electric-car maker attributed the price cut to the ending of the referral program, “which cost far more than we realized.”

Chief Executive Officer Elon Musk in mid-January announced on Twitter that Tesla would end the referral program -- which allowed customers to give their friends referral codes in exchange for six months of free charging with the purchase of a Model S, Model X or Model 3 -- by Feb. 1 because it was costing the company too much money.

Tesla has looked to cut costs this year. In January, the electric-car maker announced it was cutting 7 percent of its employees across the country as part of an organizational restructuring aimed at reducing costs and boosting profits.

The cheapest Model 3 used to start at $44,000 in the U.S., following the phase out of a federal tax credit.