Tesla has announced that the prices of the Model S are going to be reduced immediately. The Model S Long Range, which was earlier priced at $74,990, will now be available at just $71,990, while the cost of the Model S Performance also comes down by $3,000. The sporty variant will now cost $91,990 instead of the earlier price of $94,990. With both variants getting less expensive, Tesla seems to be focusing on increasing the sales of their premium sedan.
Tesla Reduces Model S Price Further Despite Price Cuts Last Summer
The Model S prices have been going down for the past few months now. The premium sedan from the Californian automaker was initially priced at $79,990 at the beginning of this year. Then in May 2020, the cost was slashed by as much as $5,000 and was brought down to $74,990. Now the price has gone even lower to $71,990. Many of the analysts feel that this is due to the slightly decreasing sales of the Model S in the past year or so.
Last month, Tesla also reduced the cost of the Model 3 vehicles that are being produced in the Shanghai Gigafactory. The prices of the Standard Range Plus and Long Range variants were slashed by $3,200 and $5,000, which made the cost of the Model 3 in China lower than that in California.
With the Model S being their oldest car in the current fleet, and the Model 3 being the cheapest, there is a lot of focus on the sales of these two models. While the overall progress for Tesla has been quite good in the past one year or so, the sales of the two aforementioned models have been dwindling.
Back in the third quarter of 2018, Tesla had managed to sell a combined total of 27,660 units of the Model S and Model 3, selling 14,470 and 13,190 respectively. This figure has gone down to a combined 15,200 units being sold in the last quarter, with the Q3 in 2019 having a similarly low total of 17,400 units. This can be attributed to the fact that the Model 3 had been launched in 2017, and the low cost of the Model 3 ensured that the sales were initially high. But now, the sales have been dipping just a bit, which has caused Tesla to reduce prices to attract new customers.
Another possible reason for this dip could be the fact that Tesla has been focusing a lot on the Model Y in the past year or so. Having also revealed the Cybertruck in December last year, it just seemed like Tesla has been keeping the spotlight on the future, and slightly overlooking this sales decline. But this price cut might be the way forward for putting these two cars back on track.
Model S has been Tesla’s premium sedan for quite some time, but the slightly higher price was putting some strain on the sales. But with $8,000 price cut in the last 5 months or so, Tesla has managed to give it a fresher impression on the market. What has also helped is the constant upgrades in performance and features that the Model S kept getting in this period. This can be validated by the fact that the current single-charge range that is offered in the Model S is 402 miles (647 km), which is almost double of what it began with back in 2012.
The $71,990 price tag is a familiar figure for the Model S, as it used to cost roughly around $70,000 when it had a smaller battery pack. The EPA-tested range back then was 285 miles (459 km), which clearly talks a lot about the progress Tesla has made.
The cost of the recently-unveiled Model S Plaid will not be affected by this, however, as it is still listed at $139,990, making it the most expensive Tesla car to be on sale. While the advance booking for this version has been opened, deliveries will only start late in 2021. This price cut is not limited to the American market, as the Canadian Model S has also received a price cut, and will now start at approximately $77,800.
Tesla is currently estimating a 4 to 8 week delivery time for both variants of the Model S in the USA. It is quite unlike Tesla to reduce prices at the beginning of the quarter, as they normally do it towards the end of the quarter to boost the numbers. It seems like they could not afford to have a dip in another quarter, following the current pattern. They haven’t yet mentioned the reason behind the timing of this price cut. Till then, the speculations will run wild.