Tesla launches cheaper Model S, X versions
- By Reuters -
- Aug 15, 2023
Tesla on Monday launched cheaper variants of its Model S sedan and Model X SUV with shorter driving ranges in the United States, looking to increase sales as high borrowing costs hamper demand for expensive electric vehicles.
It has already slashed prices of its vehicles in the U.S., China and other markets as it puts sales growth ahead of profit margins, which are still at higher levels among automakers.
The Austin, Texas-based company has also offered other incentives to reduce inventory in a strategy that CEO Elon Musk said was part of Tesla’s recession playbook.
The new S and X “standard range” models are priced at $78,490 and $88,490, respectively. They are $10,000 cheaper than the previous lowest-priced models and are available for delivery between September and October, the website showed.
“If the standard range doesn’t deliver the kind of quality Tesla drivers expect that’s an issue, but if what you get from a standard doesn’t diverge much from the premium, then existing drivers will baulk,” said Danni Hewson, head of financial analysis at AJ Bell.
The new Model S has a driving range of up to 320 miles (515 km), lower than the regular dual motor and tri-motor Plaid variants that offer up to 405 miles and 396 miles, respectively.
Model X SUV has range of up to 269 miles, well below its more expensive versions that offer up to 348 miles.
Tesla did not immediately respond to a request for comment on the new versions. Its shares were down 0.8% in trading before the bell after gaining nearly 95% so far this year.
The world’s most valuable automaker had last month said that operating income and revenue were pressured by lower average selling price and lesser sales of its more expensive models.
In the second quarter, it sold 19% more Model X and S, its oldest vehicles in the market, from a year ago.