Tesla now offers a Model 3 with almost a 400 mile range in the UK
Tesla
Tesla has introduced a new Model 3 variant designed exclusively for the UK business sector. The latest addition to Tesla's lineup features a Long Range battery pack and a single rear motor. This new offering comes as Tesla aims to accelerate the electrification of Europe's business-to-business fleet.
Comparing the New Variant to Current Model 3 Versions
Currently, Tesla has three Model 3 versions: Standard Range RWD, Long Range All-Wheel Drive, and Performance AWD. However, this new addition is tailored specifically to cater to the commercial market.
According to Electrek, Karen Bowen, senior key account manager at Tesla, revealed that the Model 3 Long Range Rear-Wheel Drive offers a segment-leading range of 394 miles (WLTP) and the highest charging convenience. The vehicle is priced at £46,990, which positions it £4,000 above the base Standard Range and £4,000 below the regular Long Range AWD.
Longest-Range Model 3 Yet, But Limited Availability
The new Model 3 variant has an impressive 394-mile WLTP range, making it Tesla's longest-range Model 3 yet. However, this model will only be accessible through Tesla's business-to-business division. Bowen stated that orders could be placed via B2B channels, with deliveries expected to begin in June. The new Model 3 variant will only be available in the UK.
Attractive Incentives for UK Businesses
This strategic move by Tesla is likely due to the strong incentives offered to businesses in the UK for purchasing electric vehicles. These incentives include a company car tax cap of 2% rather than the standard 20% to 37%, depending on the vehicle, as well as a 100% year-one deduction for the cost of the vehicle, among other benefits. These incentives have prompted many people to buy electric vehicles through businesses in the UK.
Rumors of a Longer-Range Model for China
While this Model 3 variant is currently exclusive to the UK, it is worth noting that Tesla has also been reported to be close to launching a longer-range model for the Chinese market. This new variant is rumored to have a range of approximately 404 miles, according to sources familiar with the matter. It remains to be seen if Tesla will introduce a similar model in other markets or expand its availability beyond the business fleet division.
Future Implications for Tesla's Market Strategy
Tesla's new Model 3 Long Range Rear-Wheel Drive is an exciting development for the UK business sector, offering an extended range and attractive pricing. It will be interesting to see if Tesla continues to target specific markets with tailored offerings or if this strategy will extend to other regions and market segments.
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In this article, we’ll cover Tesla’s updates on Optimus, batteries, and Tesla Energy.
Optimus
Tesla has been working away on their humanoid robot and continues to make progress in software and hardware.
First, Tesla is preparing the Fremont factory for the Optimus pilot production line, which is scheduled for completion later this year. Once it is, wider deployments of Optimus for internal use within Tesla’s facilities are expected as well. Tesla aims to have several thousand Optimus units working in its North American factories by the end of the year once the pilot production line is operational.
Tesla’s goals for production remain extremely lofty - 1 million units per year by 2030. However, they could face some challenges when ramping production.
Key components like the shoulder actuators use specialized permanent and rare-earth magnets, which are currently sourced from China. Due to recent Chinese restrictions on the overseas sale of these magnets, Tesla is seeking an exemption or alternative suppliers. They have not yet looked into modifying the shoulder actuator but will likely do so if they cannot obtain the necessary materials.
Batteries
Batteries are another item that Tesla’s teams have been working on behind the scenes for years now. The second generation of the 4680 - the Cybercell - has been IRA-compliant for some time now. This means that the Cybertruck is eligible for the US Federal EV rebate.
Tesla also achieved the lowest cost-per-kWh of any of its cells with the 4680 battery - and it is potentially one of the cheapest cells being manufactured by any vehicle battery manufacturer at this point. With dry-cathode still being worked on, Tesla may be able to squeeze more optimizations and cost efficiencies from the 4680 cells.
Additionally, Tesla is progressing with its plans for lithium refining and cathode production in the US, both of which are scheduled to commence in 2025. While the company says they’re no longer supply-constrained for non-LFP vehicle batteries, on-shoring production and sourcing critical minerals from nations outside of China will be key.
LFP batteries continue to be supply-constrained, namely for the Tesla Energy division. LFP batteries and their materials are sourced from China. Due to tariffs and limited exports, Tesla can’t obtain enough and is considering potentially building an LFP production facility in North America.
Energy
Tesla’s energy division is still experiencing some of the highest growth of any of its divisions. Year over year, Tesla saw a 154% increase in energy storage deployments, including both Megapack and Powerwall - for a total of 10.4 GWh deployed in just Q1 2025. While deliveries in energy storage remain volatile due to the nature of Megapack installations, Tesla expects growth to continue rapidly in this segment.
Tesla also deployed 1GWh of Powerwall 3 residential storage this quarter, marking its strongest quarter. Powerwall 3 has received positive feedback from customers, many of whom appreciate its new capabilities with its built-in inverter for solar.
Megapack is continuing to see demand increases, currently highlighted by utility-scale Megapack systems, as well as data centers requiring stable power delivery. Megafactory Shanghai is also online now and producing Megapacks - with an annual production capacity of 20GWh today and up to 40GWh in the future. The site has also produced over 100 Megapacks this quarter, which are all awaiting delivery.
There was a lot of interesting news from Tesla’s Q1 2025 Earnings Call, covering everything from FSD and Robotaxi - to the less glamorous but equally important Megapack and Powerwall.
Tesla is heavily leaning into artificial intelligence, and its insurance offering is just another example of how it’s improving its product or lowering costs by leveraging AI.
Tesla recently started offering an insurance discount in select states when drivers use FSD for at least 50% of their drives and now it’s introducing an AI to help handle customer claims.
Tesla has developed an in-house voiced AI agent that can assist customers in handling simple support requests for Tesla Insurance.
For customers calling in from those states, the new AI agent provides a unique way to address the most common support calls. And it’s not just answering common questions but actually making requested changes to the owner’s account.
Policy Changes
The first key item is that it automates policy changes. Simple policy updates, including adjusting your deductible or coverage limits, are now done via AI. For policyholders who are simply looking to make quick changes and don’t have any questions, this makes the process a lot quicker by not having to wait for a representative. Tesla isn’t eliminating representatives, but this could reduce the number of representatives required or reduce wait times.
Continue Where You Left Off
The second item here, highlighted by Raj Jegannathan from Tesla’s internal IT team, is that Tesla’s AI agent is able to offer summaries of the user’s last interaction with Tesla Insurance. It will summarize your last interaction and provide assistance on that particular topic if you need to continue it. That means that you don’t have to wait for a human to review your file - the AI will kick off right where you left off.
Tesla appears to be focused on improving efficiency and making support more accessible. While actual items like claims are left up to humans due to their inherently complex nature, this helps free up employees to handle more complex items. While there’s no doubt Tesla will continue to develop this AI like they do everything else, we may soon see it take on even more tasks.
More AI
This isn’t the first AI agent that Tesla has demoed - there is now a chat-based AI sales agent available on the front page of Tesla’s website, which is able to answer common questions on Tesla vehicles.
Tesla has also been improving their AI support tool available in the Tesla App is able to provide feedback on common issues and also guide users towards either solving the problem or placing a support request.
Tesla’s strategy here is to influence the cost-heavy areas associated with having humans address simple requests and instead leverage AI, which can offer instant answers and reduce support costs.
Roll Out to More States
While this new AI is currently limited to just 12 states, it is likely to follow Tesla Insurance’s expansion. Insurance seems to have been at a bit of a standstill lately. Tesla continues to improve features such as the improvements to Safety Score V2.2, but we haven’t seen Tesla roll out support to new states since it added Minnesota in November of 2022.
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