Tesla Introduces Cheaper S and X Models
Tesla Inc. has introduced lower-range versions of its Model S sedan and Model X sport utility vehicle, which are now available at a reduced price of $10,000 compared to their previous base prices.
The Standard Range Model S starts at $78,490 and offers an estimated range of 320 miles (515 kilometers), while the Standard Range Model X starts at $88,490 and has a range of 269 miles on a charge, Tesla’s website shows.
As the oldest and most expensive vehicles in Tesla’s lineup, Model S and X are not nearly as important to the company as the Model 3 sedan or Model Y SUV. But while the Model S and X make up a fraction of sales — about 3.4% of first-half shipments — the prices they’ve dominated until recently helped boost the company’s profit margins.
The starting price of the Model S is now down 25%, or $26,500, from the start of the year, while the Model X is down 27%, or $32,500.
Tesla shares were little changed at the start of regular trading on Tuesday in New York. The stock has almost doubled this year.
Chief Executive Officer Elon Musk said last month that Tesla will have to keep cutting prices if interest rates continue to rise, and has warned that it is willing to sacrifice profitability to continue growing sales. The company’s sales margin in the automotive industry fell to its lowest level in four years in the second quarter.
The introduction of cheaper versions of the Model S and X is another step by Tesla to lower prices for several days. On Monday, the company discounted mid- and high-end iterations of the Model Y by 14,000 yuan ($1,900) in China, raising concerns about another price war in the world’s most controversial electric car.
