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• Model S and Model X have become cheaper
• Price war between EV manufacturers
• Customers from 2022 paid up to 20 percent more
Tesla cuts prices for Model S and Model X
After the US electric car manufacturer Tesla already made price cuts in January of this year, there is now talk of price reductions again. As CNBC reports, the company’s two most expensive models, the Model S and Model X, are affected by the latest price cuts. Prices for the full-size sedan (Model S) recently started at $89,990, which corresponds to a price reduction of about five percent. The SUV (Model X) starts at $99,990, about nine percent cheaper than before the price reduction. For the high-end versions of the Model S and Model X in “Plaid” color, car buyers now only have to pay $109,990. That’s four percent less for the Model S and eight percent less for the Model X.
Battle for the best prizes
In recent months, Tesla has increasingly seen aggressive price cuts. In January, Tesla reduced the price of its new vehicles by up to 20 percent, making the vehicles more affordable and more eligible for US tax credits. However, the latest price cut cannot be attributed to the tax credits. Rather, it is a project intended to stimulate demand again. And apparently with success. Dan Ives, managing director of equities at Wedbush Securities, told CNBC via email, “The price cuts that Tesla has already made around the world have boosted demand by 30% and this latest price cut is another smart move.” According to Bloomberg, Musk also said at the last investors’ day that the desire to own a Tesla is “indistinguishable from infinity” and that demand will go “crazy” if the company makes its cars more affordable.
A price war has thus developed among EV manufacturers as they increasingly lower their prices in order to attract more customers and increase sales. According to CNBC, after Tesla’s price cuts in January, Ford also reduced the price of its electric crossover Mustang Mach-E by up to eight percent. “This is an EV arms race, and Tesla has the margins to cut prices and still be well ahead of other automakers. In this bleak economy, Tesla needs to rip the tape off and cut prices, and the stock market will like that,” he said Ives further.
2022 buyers paid significantly more
However, Tesla customers who bought the Model X and Model X Plaid in 2022 might not be very enthusiastic about the renewed price reductions, as EFahrer explains. At the end of 2022, for example, the 1,020 hp Model X Plaid cost $138,990. Since the first price cut in January, the Tesla model has become around 20 percent cheaper. So buyers who bought a Model X Plaid at the end of 2022 paid a whole 29,000 US dollars “too much”.
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