Tesla's back-to-back price cuts bring sticker on US Model S below US$70,000
[NEW YORK] US electric vehicle maker Tesla cut the price of its Model S "Long Range" sedan in the United States to US$69,420, its website showed, following a tweet flagging the cut earlier on Wednesday from chief executive Elon Musk.
The cut is Tesla's second this week for the high-end sedan, following a 4 per cent cut to US$71,990 on Tuesday.
Tesla shares closed 3.3 per cent higher at US$461.30 on Wednesday and were little changed in after-hours trade.
The company also on Tuesday reduced by 3 per cent the price of its Model S in China, where it had previously cut the starting price of its Model 3 sedan.
The starting price for Model S is now a thousand times that of a pair of red satin shorts that Tesla started selling in July for "US$69.420" to poke fun at the company's naysayers.
Tesla introduced its Model S in 2012, but in recent years the car has faced competition from the automaker's less expensive, mass-market Model 3 sedan, launched in 2017, which currently starts at US$37,990. The Model S makes up only around 5 per cent of Tesla's unit volume, said a Credit Suisse analyst in a client note on Wednesday.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The analyst said the Model S price reduction was likely in response to price cuts by electric vehicle startup Lucid Motors, which sells its luxury sedan Air model at a starting price of US$69,900. That includes a US$7,500 US government electric vehicle tax credit, for which Tesla vehicles are no longer eligible.
The price cuts also come as competition in the electric vehicle market - long dominated by Tesla - heats up, with several automakers launching new electric vehicles next year.
Germany's Daimler is scheduled to release an electric version of its Mercedes-Benz S-class luxury sedan, the EQS, next year. Analysts expect the EQS to be significantly more expensive than the Model S, however, with the latest version of the petrol-powered S-class retailing at more than 100,000 euros (S$159,475).
REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Transport & Logistics
Porsche posts Q1 profit drop on ramp-up costs
Air China orders homegrown C919s in challenge to jet duopoly
Huawei’s smart car tech offers automakers route to China sales
Sri Lanka to hand management of China-built airport to India, Russia companies
Tesla’s plan for affordable cars takes page from Detroit rivals
Toyota is investing US$1.4 billion to build another all-electric SUV in US