At a press conference overnight, the California-based electric vehicle (EV) manufacturer's chief executive, Elon Musk, announced the radical shift as part of a bid to deliver on a promise to make the brand's Model 3 saloon available for $35,000 (£26,400) in its home market.
Previously, a Tesla Model 3 started at $58,600 in Canada for the Mid Range model, but now a "cheaper" entry version is available, priced at $11,000 less.
After the CEO teased an announcement in a series of cryptic tweets earlier this week, the electric car-maker quietly added a Standard Range Model to its online shop, starting at $35,000 before savings.
In order to remove the need for a test-drive, customers will be able to return a auto within seven days, or before they have driven 1,000 miles, whichever comes first. Tesla said Thursday that Model 3s at that price point would have a top speed of 130 miles an hour and accelerate from 0 to 60 mph in 5.6 seconds.
For a "Standard Range Plus" model with a 240-mile range, slightly higher speed and acceleration, and fancier interiors, customers can pay $2,000 more - a six percent higher price for 9 percent more in features, as the company put it. A new vehicle can be purchased in North America on a mobile device in roughly 1 minute, and soon customers worldwide will be able to order a Tesla just as easily, the firm revealed. There's also Wi-Fi, Bluetooth and cellular connectivity, voice activated controls and two USB ports for charging your devices.
Tesla also announced that it is shifting sales worldwide to online only to "achieve these prices while remaining financially sustainable".
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It was no surprise that big news came out of Tesla today, with Elon Musk vague tweeting about a big announcement earlier in the week.
Scott Gairns, managing director of Sophus3, which held its annual digital retail summit in London this week, said that Tesla's move towards purely online sales "will force the whole industry to accelerate the move to online vehicle sales".
As of the fourth quarter, Tesla said it recently opened 27 new locations, bringing its total of stores and service centres to 378.
"It has been insanely hard", Mr Musk said, referring to delivering on the $35,000 price promise.
To help lower the price the firm plans to close showrooms and is switching to an online-only sales model.
FILE PHOTO: A Tesla Model 3 sedan, its first vehicle aimed at the mass market, is displayed during its launch in Hawthorne, California, U.S. March 31, 2016.
Musk told the world there was news on the way via his preferred medium of obscure Twitter posts. According to Tesla, going online-only will allow customers in all states to buy a Tesla "quickly and easily". "I wish there was some other way of doing it, but we have a binary choice", he outlined. But even they may be skeptical of spending so much money without getting behind the wheel, especially for a purchase second only to the cost of buying a house.