Tesla, Inc. (NASDAQ: TSLA) has just introduced lower-priced versions of their flagship vehicles, the Model S sedan and Model X sport utility vehicle. These upgraded versions come with a price drop of $10,000 compared to their previous base prices.
The Standard Range Model S starts at $78,490 and boasts an estimated range of 320 miles (515 kilometers). Simultaneously, the Standard Range Model X is priced at $88,490, offering a range of 269 miles on a single charge, as shown on Tesla’s official website.
The Model S and X, despite being the older and more expensive members of Tesla’s vehicle range, have taken a back seat in the company’s strategic focus compared to the Model 3 sedan and Model Y SUV. These two models made up only 3.4% of the first-half deliveries, although their higher price points have significantly bolstered Tesla’s profit margins until now.
Tesla, Inc. (NASDAQ: TSLA) has slashed the starting price of the Model S by 25%, or $26,500, since the start of this year. The Model X has also undergone a 27% price reduction, equating to a $32,500 drop.
Tesla stock fell 1.5% in the pre-market trading session Tuesday. The stock has almost doubled this year.
Last month, Elon Musk, the CEO of Tesla, hinted at the necessity of price adjustments in light of potential interest rate hikes. Musk has further emphasized his willingness to prioritize sales growth over immediate profitability. The company’s automotive gross margin reached its lowest point in four years during the second quarter.
The latest announcement follows on the heels of Tesla’s recent maneuver to slash prices in the competitive Chinese electric vehicle market. On Monday, the company slashed prices for the middle and high-end versions of the Model Y by 14,000 yuan ($1,900) in China. This unexpected price cut has sparked concerns about a renewed price war in the fiercely competitive global EV market.