According to Tesla's website, the starting price of the Model S is now $89,990, a reduction of 5.3%, while the Model X now starts at $99,990, down 9.1%. In addition, the company has lowered prices of the higher-performance Plaid versions of each vehicle by 4.3% and 8.3%. As a result, the Plaid versions of the Model S and X now cost $26,000 and $29,000 less than they did in early January, with a new price of $109,990.
Tesla's dynamic pricing strategy is unique in the automotive industry, as manufacturers typically only change suggested retail prices from one model year to the next. The company’s price reductions for the Model 3 and Y in January were at least partially driven by the desire to qualify for tax credits under the Inflation Reduction Act. However, after the Biden administration changed its definition of passenger cars and sport utility vehicles, the price limit for Model Ys eligible for credits increased, prompting Tesla to raise prices again.
During Tesla's investor day on March 1, Musk stated that even small changes in price can have a significant impact on demand, saying that the desire to own Teslas was "indistinguishable from infinite," and that demand would "go crazy" as the company made its cars more affordable.
Tesla's shares rose 0.5% on Monday morning before regular trading began, following the announcement of the price cuts. The company's stock has risen 61% this year after a 65% plunge in 2022.
Source: Autoblog
