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.
With the $3,000 discount in effect, the price of a new Tesla's business model.
There's More Than One Reason For Price Drops
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.
Source: Tesla