Electric vehicle manufacturer Tesla Inc. has expanded its lineup by adding lower-range versions of its popular Model S sedan and Model X sport utility vehicle (SUV). These new models come with a price reduction of $10,000 compared to their previous base prices.
The Standard Range Model S is now available at a starting price of $78,490 and offers an estimated range of 320 miles (515 kilometers) on a single charge. On the other hand, the Standard Range Model X starts at $88,490 and can travel up to 269 miles on a full charge. These updated prices were announced on Tesla's official website.
Although the Model S and X are the oldest and most expensive vehicles in Tesla's product range, they are not as crucial to the company's success as the Model 3 sedan or Model Y SUV. Despite accounting for only a fraction of Tesla's overall sales, approximately 3.4% of deliveries in the first half of this year, these luxury models have played a significant role in boosting the company's profit margins.
This year, Tesla has made significant price adjustments for the Model S and X. The starting price of the Model S has been reduced by 25%, or $26,500, since the beginning of the year, while the Model X has undergone a 27% price reduction, amounting to $32,500.
Tesla's stock price remained largely unchanged as regular trading began in New York on Tuesday. However, the stock has witnessed a nearly 100% increase in value so far this year.
Elon Musk, the CEO of Tesla, recently stated that if interest rates continued to rise, the company would have to further lower prices. He also mentioned that he is willing to sacrifice profitability in order to maintain sales growth. In the second quarter, Tesla's automotive gross margin dropped to a four-year low.
In addition to introducing cheaper versions of the Model S and X, Tesla has also reduced prices for certain models in China. On Monday, the company lowered the prices of the middle and high-end variants of the Model Y by 14,000 yuan ($1,900). This move has raised concerns about a potential price war in the highly competitive Chinese electric vehicle market.