5 takeaways from Tesla’s Model 3 announcement

Tesla CEO Elon Musk made some splashy announcements Thursday. But he also delivered some bad news for investors.

Here’s what he said:

1. Cheaper Model 3: Tesla is finally releasing a pared-down version of its Model 3 sedan. The price tag: $35,000.

The base model will have 220 miles of range, a top speed of 130 mph and it will accelerate from 0 to 60 miles per hour in 5.6 seconds. Delivery will take two to four weeks, according to Tesla’s website.

It’s also selling a higher performance, long range version, called the Standard Range Plus. That offers more range and faster speed, and it costs $2,000 more before incentives.

“For 6% more money, you get 9% more range, more power, and an upgraded interior,” Tesla said in a blog post.

2. Store closures: Musk said Tesla is closing most of its stores and laying off retail workers to make it financially possible to produce the cheaper model.

That means all Tesla purchases will be done online. Musk said a “small number of stores in “high-traffic locations” will remain open as galleries and information centers where customers can see the cars in person and ask questions.

3. New return policy: Because of its new purchase policy, Tesla said it will make returning cars easier for customers. Buyers will have seven days or 1,000 miles during which they can return the car for a refund. While returns are the norm for most products, they’re nearly unheard of for new cars which lose significant value as soon as they’re driven by an owner.

4. Service improvements: At the same time, Tesla is trying to improve what has been the most-criticized part of the Tesla ownership experience: getting the cars serviced. The company is aiming for “same-day, if not same-hour service.” Tesla said that in most cases, the company will come to the customer to service the car, rather than have the customer come to a Tesla service center.

5. Profit warning: Musk said Tesla probably won’t turn a profit for the first quarter of 2019 — but Tesla could be in the black by the second quarter.