Tesla announced substantial price cuts, some as much as five figures, on its flagship Model S sedan and Model X crossover SUV.
According to reporting by Reuters, the EV manufacturer will reduce prices on both trim levels of the Model S by $5,000, and cut the cost of both trim levels of the Model X by $10,000.
This is the fifth price adjustment since the start of the year, and Tesla CEO Elon Musk previously said prices would be coming down on a number of occasions. The move comes after previous price cuts of up to 20% in January.
“The desire for people to own a Tesla is extremely high. The limiting factor is their ability to pay for a Tesla,” Musk said during an online investor briefing last week.
Tesla’s product mix is heavily weighted towards the less expensive Model 3 sedan and Model Y crossover. Together, those models made up 96% of Tesla’s 2022 sales. The Model S and Model X start with substantially higher prices, and Musk intends to increase sales of the top trims with these price reductions.
After the reductions, the base price of a Model S is reduced to $89,990, and the Plaid performance trim will cost $109,990. The base Model X will retail at $99,990, while the Plaid trim will carry a price tag of $109,990.
Past price cuts triggered some dissatisfaction among existing Tesla buyers, especially those who purchased vehicles just before the price cuts. No reimbursement was provided for those buyers.
No affordable Tesla announced yet
Tesla had been widely expected to announce a new lower-cost “Model 2” at last week’s investor presentation, but while the executives spoke at length on cutting production costs, no new models were mentioned. Tesla stock fell 6.5% following the presentation.
However, a new affordable Tesla was notably lurking in the shadows around the presentation, as executives talked about future Tesla vehicles having a lower cost of ownership than popular legacy internal combustion economy cars such as the Toyota Corolla. The slides in Tesla’s presentation simply mentioned an unnamed “Next Gen” vehicle with lower total cost of ownership.
One thing that market watchers are good at is looking for hints, and industry executives are adept at dropping those hints without committing to any particular price point or availability dates. We expect a strategically timed announcement from Tesla at a future date.
Cybertruck production still in the future
Tesla had a prototype Cybertruck on display for Investor Day, and it has reportedly built a small number of the trucks for beta testing. The company called the display model a “pre-production beta test” version of the Cybertruck.
Tesla plans to put the Cybertruck into production this year, but customer deliveries may not take place in large numbers until 2024.
Additionally, the company’s Investor Day presentation showed a mystery vehicle under a cover, which some Tesla followers believe will be a commercial van. Tesla is also expected to revamp the aging Model Y vehicle in the near future.
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- Source: https://www.thedetroitbureau.com/2023/03/tesla-cuts-prices-on-upscale-model-s-and-model-x/
