- Tesla recently cut pricing for the Model S, Model X, and Model 3. The Model S and Model X in particular are now $5,000 cheaper.
- Model Y pricing was unchanged.
- Tesla’s new price cuts were made in response to the ongoing coronavirus pandemic which has undeniably impacted the company’s quarterly sales.
In something of an abrupt and unexpected move, Tesla today lowered the price for nearly every model in its vehicular lineup. While the price for a new Model 3 went down by $2,000, the savings are more substantial for the Model S and Model X which can now be purchased for $5,000 cheaper than before. You can now pick up a brand new Model S, for example, for about $75,000 as opposed to $80,000. Model Y pricing, meanwhile, stayed the same.
The price reductions above are only applicable for purchases in North America, but the company is expected to implement similar price cuts in China in the near future.
The impetus behind Tesla’s new price cuts, not surprisingly, are lagging sales. With the coronavirus impacting the world economy on the whole, and with investors always paying close attention to Tesla’s quarterly delivery figures, Tesla is simply trying to boost demand in an otherwise challenging economic environment.
Auto retail sales in the United States likely halved in April from a year earlier, showed data from J.D. Power. However, sales in May are likely to improve due to pent-up demand and incentives offered by most carmakers, the analytics firm said.
Additionally, Tesla yesterday removed any reference to free Supercharging access for new Model X and Model S buyers.
The current quarter aside, Tesla has been on something of a hot streak over the past 24 months. In 2019, for instance, Tesla sold more cars than it did in 2017 and 2018 combined. More recently, Tesla delivered 88,000 cars during the first quarter of 2020. As a point of contrast, and to help illustrate just how quickly Tesla has grown, the company delivered 14,810 vehicles during the first quarter of 2016.
Before the current pandemic hit, Tesla said that it’s aiming to sell 500,000 vehicles worldwide in 2020. Though the company initially said it could reach the 500,000 threshold “comfortably,” the coronavirus might see the company fall a bit short.
Sales figures aside, it’s worth noting that Tesla has finally shown investors that it can consistently turn a profit. During the recent quarter, for example, Tesla posted a profit of $16 million. And while that’s not exactly a staggering figure, it’s an encouraging sign for a company that was previously bleeding money for years on end.
Looking ahead, it stands to reason that Tesla will weather the coronavirus storm and emerge unscathed. Interest in the Model 3 hasn’t waned in a meaningful way and the company may release its highly anticipated Cybertruck as early as next year. It’s easy to forget that pickup trucks are routinely the top-selling vehicles in the U.S. every single year, which is to say that Tesla’s foray into that market should result in a rather significant increase in sales over the next few years.