Certain versions of Tesla’s Model S and Model X have been discounted by an additional 4% and 9% respectively, following unexpected lineup-wide price cuts in January.
The two vehicles are among the most expensive amongst Tesla’s offerings, and with the new price cuts the basic Model S and Model X Plaid variant now cost $89,990 and $109,990 respectively. Before January’s price cuts, the vehicles were $104,990 and $138,990, meaning that the automaker has dropped each car’s price by roughly 14% and 21% over a two month period.
Speaking at the company’s latest Investor Day in Texas, CEO Elon Musk claimed that demand for Tesla vehicles was “infinite,” while also noting that better affordability would further stoke consumer interest. “We found that even small changes in the price have a big effect on demand, very big,” said the entrepreneur. The Model S and Model X price cuts arrive roughly five days after these comments.
After the initial round of cuts in January, market analysts expressed concerns that Tesla was ramping up for an electric vehicle price war. Ford countered weeks later with a price reduction of its own, this time for the Mustang Mach-E. However, most automakers have refused to participate in competitive price cuts, keeping prices fairly stable across the industry. One of the unexpressed goals behind Tesla’s initial wave of discounts was to meet pricing guidelines in the Biden Administration’s EV tax credits, although those requirements have since become more lenient.
U.S. consumers are still facing down high car prices, poor trade-in values, record-breaking auto-loan payments and burdensome insurance premiums. While the Model S and Model X both qualify as luxury models, the lower prices could make the EVs more accessible to buyers. Whether the discounts will revive discussion of a price war remains to be seen.
