Tesla has cut the prices of Model S and Model X vehicles by 5% and 9%, respectively.
Model S will now cost $89,990, while the Model X starts at $99,990.
After Tesla's decision to reduce its prices on Model 3 and Model Y in January 2023, other companies followed suit.
- Ford dropped the prices of its electric Mustang Mach-E crossover by up to 8%.
- Elon Musk recently stated that the decision has doubled the demand from consumers.
- The price slash was seen by analysts as a move by Tesla to put more pressure on other EV manufacturers because they have lower profit margins than Tesla.
- Many EV manufacturers still lose money on every EV they sell because they are still early in the mass production process.
- During Tesla's recent investor day conference, Elon Musk stated that Tesla could manufacture its vehicles in factories that are 50% smaller than the current ones, meaning the cost of their production can drop dramatically. This would allow the company to theoretically slash prices further and generate even more demand from consumers.
Tesla's recent price reduction helped the company qualify for the 2023 Federal Tax Credits program. Tesla buyers could benefit by purchasing the EVs for as much as $7,500 less than the previous price, depending on the model.
