April 12, 2019, 2:35 PM 0:28 Tesla Inc. CEO Elon Musk exits after attending for an S.E.C. hearing at the Manhattan Federal Courthouse in New York, April 4, 2019. Eduardo Munoz/Reuters The updates come against the backdrop of the company's continuing struggles to deliver the Model 3 at a $35,000 price point and move the automaker from a niche luxury brand into a maker of affordable electric vehicles for the masses. However, the company has been hampered by public problems, ranging from fines by the Securities and Exchange Commission (SEC) over founder and CEO Elon Musk's tweets to more behind-the-scenes turmoil, such as 7% cuts in its workforce in January. Those layoffs marked the second round of mass firings in six months. The company has also seen several executive turnovers. Industry experts greeted the news with wariness. "After years of being a media and enthusiast darling, Tesla is now facing a reckoning. Between the cost cuts, waning demand for its vehicles and now making the $35,000 Model 3 much harder to buy, the company is now quietly realizing it has to play by the same rules as every other automaker," Jessica Caldwell, executive director of industry analysis at automotive research firm Edmunds, told ABC News The grandiose promise that has become the thorn in Musk's side is the $35,000 price point. He reiterated this when he announced the January layoffs, writing about the twin goals of cutting costs and ramping up the production rate of the Model 3. "Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220-mile), standard interior Model 3 at $35k and still be a viable company. There isn't any other way." (MORE: Tesla's Autopilot blamed by driver for accident, police say) Musk promised a $35,000 Model 3 as early as 2016 and has yet to deliver. In February, he announced the cars were ready to ship, although no delivery date was named. "Tesla was the one who decided that $35,000 was the magic number for an affordable [electric vehicle]," Caldwell said. "The company backed itself into a corner by making such a big deal about the Model 3 being that exact price without knowing exactly how they were going to do it. Because most Tesla buyers opt to pay extra for all the high-tech features, this likely won’t have a huge impact on Model 3 sales, however, it does deliver another tough blow to the company’s reputation." Tesla also recently lost a buffer on pricing because of the United States' electric vehicles policy. The electric vehicle tax credit, which offset the price of a new Tesla by $7,500 was halved on Jan 1, so it is now only $3,750. The tax credit applies to all manufacturers for their first 200,000 vehicles. Then it's halved and then halved again before it is phased out. As a result of the reduced credit amount, Tesla had been attempting to slash prices. Related Topics