Danny Lee | Bloomberg
In an effort to make their vehicles more accessible, Tesla has added new lower-range versions of the Model S sedan and Model X sport utility vehicle to their lineup. These new versions are priced $10,000 less than their previous base prices.
According to Tesla’s website, the Standard Range Model S now starts at $78,490 and provides an estimated range of 320 miles. Meanwhile, the Standard Range Model X starts at $88,490 and has a range of 269 miles on a single charge.
While the Model S and X are the oldest and most expensive vehicles in Tesla’s lineup, they are not as crucial to the company’s success as the Model 3 sedan or Model Y SUV. The Model S and X only account for about 3.4% of first-half deliveries. However, the higher prices of these vehicles have helped bolster Tesla’s profit margins.
Since the beginning of the year, the starting price of the Model S has dropped by 25%, or $26,500, while the Model X has come down by 27%, or $32,500.
Tesla’s stock fell 1.5% before the start of regular trading in New York. However, the stock has seen a significant increase of almost double this year.
CEO Elon Musk previously stated that if interest rates continued to rise, Tesla would have to continue lowering prices. He has also expressed a willingness to prioritize sales growth over profitability. In fact, the company’s automotive gross margin reached a four-year low in the second quarter.
This latest move by Tesla to introduce cheaper versions of the Model S and X comes on the heels of another recent price reduction. The company recently discounted the middle and high-end versions of the Model Y in China, fueling concerns about a potential price war in the highly competitive market for electric vehicles.
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