Two of Tesla’s most expensive electric vehicle (EV) models in the US have had their prices cut, in effort to stoke demand
Tesla is once again demonstrating it is not immune to the economic downturn and global uncertainty that is currently impacting consumer spending habits.
Reuters reported that Tesla has cut prices on its two most expensive electric vehicles in the United States, according to the company’s website.
This move comes just days after CEO Elon Musk said recent price cuts on other models had stoked demand.
Reuters noted that the latest price cuts are Tesla’s fifth adjustment since the start of the year, and ranged from 4 percent on the performance version of the Model S, to 9 percent on the more expensive Model X.
Musk has said repeatedly in recent months that Tesla would focus on bringing prices down to drive demand and that it had seen success in sparking orders with global discounts introduced in January.
Tesla in early January cut prices on all of its models in the United States, by $2,000 for each car, in an effort to offset a reduction in a federal tax cut for buyers of the electric vehicles.
Later that month Tesla abruptly cut its EV prices in China, following an earlier round of price reductions in October 2022.
Tesla took the decision in response to the slowing demand in China, and cut prices for its Model 3 and Model Y cars by up to 9 percent in China, and offered insurance incentives.
But the second price reductions left many Tesla owners in China angry at missing out on the price cuts.
As a result, hundreds of angry Tesla buyers in China gathered at the electric carmaker’s showrooms and distribution centres across the country to protest about missing the price reductions.
Posts on Chinese social media showed crowds of vehicle owners at stores and distribution centres in Shanghai, Chengdu, Shenzhen and other cities.
Car owners ransacked a Tesla Experience Centre in Chengdu in the southwestern Sichuan province and posted a handwritten list of demands signed with names and fingerprints, according to videos circulating on social media.
Not to be put off, a week later Tesla applied similar price reductions for customers in Western markets.
Tesla had cut prices by up to a fifth in US, UK and Europe as it contends with slowing demand and increased competition.
For example, the price of the cheapest Model 3 saloon car, the rear-wheel drive version, dropped by £5,500 to £42,990.
Now Reuters reported that Musk has once again lowered the price of Tesla EVs, in an effort to stoke demand.
“The desire for people to own a Tesla is extremely high. The limiting factor is their ability to pay for a Tesla,” Musk was quoted as saying last week at Tesla’s investor day.
Tesla did not immediately respond to a request for comment on the most recent price cuts.
Tesla’s website showed it had cut prices on both versions of its Model S by $5,000. The basic version of Model S was cut by 5 percent to $89,990, while the price of the performance, Plaid variant was cut by 4 percent to $109,990, Reuters noted.
Prices of both the performance and basic variants of Model X cars were cut by $10,000, the electric vehicle maker’s website showed. The price of the basic, AWD version of the Model X was cut by 9 percent to $99,990 while its performance Plaid version was cut by 8 percent to $109,990.
Just after Christmas 2022 it was reported that Tesla planned to run its key Shanghai plant on a reduced schedule in January 2023, continuing its reduced production that began earlier in December.
The Shanghai plant, with about 20,000 workers, accounted for more than half of Tesla’s production for the first three quarters of 2022.
In January Tesla revealed it had shipped a record 1.3 million vehicles last year, a 40 percent increase from the previous year, but it had missed analysts’ expectations.