A driver uses a Tesla Supercharging station on Thursday, March 2, 2023 in Corte Madera, California, US.
David Paul Morris | Bloomberg | Getty Images
Tesla In a bid to boost demand for its cars with aggressive discounts, it has cut prices of its two most expensive models in the US, Model S and Model X.
The Tesla Model S now starts at $89,990 according to the company’s website, which is about 5% less than the previous price. Meanwhile, the Model X starts at $99,990, marking a 9% reduction.
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For the high-end “Plaid” versions of the Model S and Model X, car buyers can now expect to pay $109,990. This is down 4% for the Model S Plaid and 8% for the Model X Plaid.
Tesla shares were down less than 1% in morning trading on Monday.
This follows a series of aggressive discounts from the company in recent months. In January, Tesla slashed the prices of its new cars by up to 20%, making the vehicles more affordable and eligible for federal tax credits in the US.
Latest Price Cut Likely Unrelated to EV Tax Credits Introduced by the President Joe Bidenof the Inflation Reduction Act, as they remain above the $55,000 limit to qualify for up to $7,500 to purchase a new vehicle.
The speed and frequency of Tesla’s price adjustments are well beyond what established automakers attempt in an industry where the base price of a vehicle in inventory is still referred to as the “sticker price”.
EV Price War
This has ignited a price war between competing carmakers trying to lower their prices to lure more customers and increase sales. After Tesla cut its January prices, ford The prices of the electric Mustang Mach-E crossover have been slashed by up to 8%.
Musk has made Tesla a focus of late to drive down prices to increase demand for its products.
On the company’s fourth-quarter earnings call in January, he said Tesla was looking at orders to nearly double the rate of production. Musk said at the time, “These price changes really do make a difference to the average consumer.”
EV arms race
This latest price cut is another smart move as Tesla has already catalyzed demand globally 30% out of the gate, Dan Ives, managing director of equities at Weinbush Securities, told CNBC via email. Is.”
“This is an EV arms race and Tesla has the margin to cut prices and still stay above other automakers. In this economic cloud Tesla needs to take off the band-aids and cut prices and The Street would love it.”
To discount those ratios, Tesla has to match them with production cost reductions. It’s a goal the company is working hard to achieve, with efforts already underway to cut some expenses in its supply chain.
Last week, a Tesla executive said the company was developing an EV motor that could be made without rare earth metals – which are vital for motors used in electric vehicles – with less mining of these minerals. Citing the need for cost and environmental risks.