Latest Tesla Models Debuts For $10,000 Less as Musk Continues to Slash Prices
Key takeaways
- Tesla’s Model S and Model X have had their prices slashed again
- Elon Musk’s recession strategy has investors worried as the company prioritizes sales over profit margins
- Tesla’s share price has declined 20% since the second-quarter earnings report
Tesla’s bargain-basement drive continues with news of two new lower-cost models arriving in the U.S. The freshly unveiled Model S sedan and Model X sports car are both $10,000 cheaper than previous base models, marking a continued price drive from the company as it looks to boost its bottom line. Let’s get into it.
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What’s the latest with Tesla?
Anyone that had their eye on the Model S sedan and Model X sports car, you’re in luck. The new Standard Range Model S starts at $78,490, while the Standard Range Model X costs $88,490.
Both of the models, which only make up around 3.5% of Tesla’s total sales, have seen a significant reduction in price since the start of the year. The starting price of the Model S is now 25% cheaper, while the Model X has plunged 27%.
There aren’t any plans to offer firmware updates to improve the range and performance of the two EV models in the future, but the chunky $10,000 should boost sales regardless.
Are Teslas cheaper now?
It depends on where you are in the world. Tesla made price cuts for its U.S. customer base in the spring to coincide with a new EV tax credit; the Model Y and Model 3 vehicles saw prices slashed between 11% to 20%.
The world’s biggest EV maker has also done the same in China. It confirmed in a Weibo post on Sunday that it was dropping the prices of two Model Y versions by $2,000 each, with the Model 3 receiving a $1,100 insurance subsidy until the end of September.
Investors might be skeptical of the news. Tesla’s second-quarter earnings beat showed that while the company delivered record amounts of EVs in the U.S., totaling 466,140 cars in the three months to the end of June, the company’s operating income fell 3%; the operating margin was at 9.6%, the lowest percentage for the last five quarters.
Wall Street blamed the price cuts, and Tesla’s stock has been on a steady decline, losing 20% since July 19.
The bottom line
Elon Musk has a plan and isn’t deviating from offering price cuts on Teslas to keep sales buoyant. The approach has left Wall Street despairing and sent the stock plummeting, but the price cuts have clearly worked so far in putting more Teslas on the streets.
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