A spokesperson told Electrek that the price decrease was enabled by the cancellation of the "referral program, which cost far more than [the company] realized." The automaker's referral scheme allowed Tesla owners to give five friends six months of free Supercharging with the purchase of a new vehicle. Apparently, the free charging and other benefits drove up costs too much, compelling the company to end the program on February 1st.

This the second time Tesla slashed Model 3's prices since its federal EV tax credit has been cut in half. In January, it took $2,000 off the prices of all its vehicles to offset the new reduced tax incentives.