The following article, Tesla Slashes Model S, X Prices By Up To 19% — And Makes One Of Them Eligible For Tax Credits, was first published on Flag And Cross.
Tesla, Inc. (NASDAQ: TSLA) has continued its trend of reducing prices, this time targeting its Model S and Model X electric vehicles in the U.S.
What Happened: The updated pricing on Tesla’s website reveals significant cuts of up to 18.8% for these higher-end models:
- Model S dual motor all-wheel drive: $74,900 (down 16.4%)
- Model S Plaid tri-motor AWD: $89,990 (down 17.05%)
- Model X dual-motor AWD: $79,990 (down 18.8%)
- Model X Plaid tri-motor AWD: $89,990 (down 17.1%)
Moreover, these price adjustments make the Model X eligible for a government EV tax credit of $7,500, reducing its effective price to $72,490 after the credit.
What Else? Tesla has also decided to make all color options for Model S and X vehicles free, without any extra cost. This decision includes the ultra-red color, which previously carried a $3,000 fee.
“Interestingly, these price cuts also extend to Tesla’s full self-driving software, with subscription pricing dropping from $15,000 to $12,000,” said Benzinga.
Why It Matters: While these measures have been met with some criticism, data from Counterpoint Research indicates that Tesla’s global EV market share increased by four percentage points year-on-year, reaching 20% in the second quarter.
However, the company’s stock has faced challenges following the second-quarter earnings announcement, and some analysts suggest that focusing on promoting EV adoption and unique-selling propositions may yield better long-term benefits than short-term price cuts.
End Game: Tesla’s decision to prioritize affordability could be in line with CEO Elon Musk‘s strategy of potentially selling EVs at minimal profit, with the anticipation of generating future revenue through the company’s FSD software.
While these price cuts have sparked interest among consumers, Tesla must also address regulatory concerns and user skepticism surrounding FSD, which could potentially delay its launch.
Price Action: Tesla’s stock performance remains mixed despite these price adjustments and other developments like the Model 3 refresh launch. At the close of Thursday’s session, Tesla’s stock was up 0.46% at $258.08, according to data from Zenger News Pro. “The is down 11% since July 19, after the company published second-quarter results,” said Benzinga.
Produced in association with Benzinga
Edited by Priscilla Jepchumba and Judy J. Rotich