Tesla: Elon Musk Confirms Model S Price Is Dropping To $69,420



Tesla just made another price adjustment to its Model S sedan, slashing the purchase to drive by over $3,000, and the price is about to drop once again, according to Elon Musk. This move comes at an appropriate time as sales for one of the electric vehicle manufacturer’s more expensive models has been slumping. While it may seem the price cut could spell trouble behind Tesla’s doors, it could actually mean a win for everyone.

Tesla introduced the Model S in 2012 as its first electric vehicle to enter mass production. Since then, it has seen several variations and upgrades based on performance, speed, and mile range. Announced in August by CEO Elon Musk, the Model S’ newest “Plaid” version can travel an EPA estimated 520 miles on a single charge, and zoom 0-60 mph in under two seconds. The Model S currently sits as the fastest and furthest traveling electric sedan on the planet. This price cut to all three current versions of the Model S is the second of 2020 so far. This past May, Tesla cut the costs of its Model S and X by $5,000 each, and its more consumer friendly Model 3 by $2,000. In July, the manufacturer also lowered the price of its newest EV, the Model Y by $3,000.

Related: How Long Is The Wait Time For A New Tesla?

With the $3,000 discount in effect, the price of a new Tesla Model S comes t0 $71,990. However, Elon Musk just pushed the pricing envelope further (with subtle internet humor) by Tweeting that the new price of a Model S will actually come out to $69,420. While at first glance these price drops could garner speculation about the status of Tesla’s manufacturing profits, a glimpse into their quarterly numbers shows there’s really not much to worry about. According to Tesla’s investor relations page, it delivered nearly 140,000 vehicles in the third quarter of an economy battered by a global pandemic. That is a 40-percent increase in deliveries from the same time last year, highlighting how both the demand and the speed of production has picked up significantly for Tesla. That being said, the Model S and Model X only made up 13-percent of the EVs produced this quarter, and only 11-percent of the EVs delivered. This slump is a possible reason for the price cuts, but it makes sense when you consider Tesla’s business model.

When you look at Tesla’s current lineup of four models as a whole, it’s easier to see what the company is working toward. It first came out with the Model S sedan, then the Model X SUV. Next it debuted a much more affordable sedan in the Model 3 and a more affordable crossover SUV in the Model Y. Essentially, Tesla is competing against itself. Not simply because it’s the most prevalent and successful electric vehicle manufacturer, but as the world’s most valuable automaker. As a company focused on innovation and improvement, it’s no wonder Tesla has released more affordable, yet high quality versions of its first models. This plan seems to gear toward slowly phasing out those more expensive models, as Tesla moves toward manufacturing other vehicles like semi-trucks, Cybertruck, and soon a $25,000 model.

CEO Elon Musk has been very clear from the early days of the company that the business strategy was to begin with cool, luxury vehicles to gain brand popularity, then produce more affordable vehicles for all to drive. With Musk’s announcement of new streamlined production practices and in-house battery manufacturing, Tesla appears to be one step closer to its goal. As Tesla increases its global manufacturing and battery efficiency, consumers should see even further drops in the cost of its electric vehicle fleet. That’s good news for those hoping to get behind the wheel of a Tesla soon.

More: Tesla Car Prices In 2020: How Much Model S, 3, X, & Y Cost

Source: Tesla

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