In a recent interview with the New York Times, Tesla founder Elon Musk said the company would have an easy time convincing people to use the Model 3 in the US because the cars would be cheaper than buying them outright.
That means Tesla would probably have to get approval from regulators in the states where it plans to start selling its vehicles.
The US government will have to approve Tesla’s first US car, and the US market has been a very competitive one, said Andrew Cramer, chief investment strategist at FirstMark.
The car maker will likely have to sell a higher number of Model 3s than expected, Cramer said.
But that won’t necessarily cause the price of the Model S sedan to fall.
Tesla currently sells about 2,000 Model S sedans per month, compared to more than 2,500 for the Model X. “If they’re selling at the same prices, that will probably mean less pressure on the price,” Cramer told CNBC.