Days after Tesla CEO Elon Musk said that Tesla’s recent price cuts on some models stoke demand, the automaker cut prices for its two most expensive EVs. The price cuts are in the US, for 4% on its performance version of Model s and 9% on the more expensive Model X.
Musk has said repeatedly in recent months that Tesla would focus on bringing prices down to drive demand and that it had seen success in sparking orders with global discounts introduced 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 last week at Tesla’s investor day. Tesla slashed prices on its cars across all of its markets in January, offering discounts of up to 20% in what many analysts saw as the start of a price war by the electric vehicle market leader. It has been adjusting prices since with a pace and frequency that goes beyond what established automakers have attempted in an industry where a car’s base price is still referred to as a “sticker price” on a vehicle in inventory.
The Model S and Model X, which come in base all-wheel drive (AWD) and performance “Plaid” editions, represented about 4% of Tesla’s global deliveries in 2022. Its two cheaper models, the Model 3 sedan and Model Y crossover, made up the rest. Tesla’s website showed it had cut prices on both versions of its Model S by $5,000. The basic version of Model S was cut by 5% to $89,990, while the price of the performance, Plaid variant was cut by 4% to $109,990.
Prices of both the performance and basic variants of Model X cars were cut by $10,000, the electric vehicle maker’s website showed. The price of the basic, AWD version of the Model X was cut by 9% to $99,990 while its performance Plaid version was cut by 8% to $109,990. Tesla has a new version of the Model 3 codenamed “Highland” scheduled to go into production later this year and a change to the Model Y codenamed “Juniper” for next year. The company’s market value has fluctuated in recent months over investor concerns about Tesla’s ability to keep growing, as well as over questions surrounding Musk’s other ventures. The billionaire took over Twitter Inc. last year and has implemented a number of dramatic changes at the company. The company opened in 2023 with the earlier round of price cuts, which reverberated through the auto industry. Some car makers followed and lowered their prices at a time when those companies are trying to lure investors and customers.