Tesla inc. has again slashed the prices of its more expensive models, days after Elon Musk said cuts earlier this year had spurred interest in the company’s electric vehicles.
The Model S and X now start at $89,990 and $99,990 in the US, down 5.3% and 9.1% respectively, according to Tesla’s website. The company has reduced the prices of the higher performance Plaid versions of each car by 4.3% and 8.3%.
At $109,990, the Plaid iterations of the S and X now cost $26,000 and $29,000 less than they did in early January.
Musk said last week that the desire to own Teslas is “indistinguishable from eternal,” and that demand will “go crazy” as the company makes the cars more affordable. The drop in prices for the S and the X models suggests again that the vehicles may have gotten a bit of a boost from the cuts the company made to its lineup seven weeks ago.
“We’ve found that even small price changes have a big impact on demand, really big,” Musk said during Tesla’s March 1 investor day.
Tesla shares rose 0.5% at 6 a.m. in New York on Monday, before the start of regular trading. The stock is up 61% this year after falling 65% in 2022.
Tesla’s pricing dynamic is unique in the automotive world, where manufacturers typically only change what they propose to their retailers from one model year to the next. Model 3 and Y sales in January made the vehicles more affordable relative to the average price of a new car in the US than ever before.
The changes in 3 and Y are at least in part driven by Tesla wanting the models to qualify for tax credits available under the Inflation Reduction Act. After the Biden administration changed how it distinguishes between passenger cars and sport utility vehicles in early February, thereby raising the price limit for the Model Y to qualify for the credits, it was reinstated Tesla prices.
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