Carrot & Stick: Days After Cutting Prices, Tesla Chops Base Models
There will be no Ace of Base prizes for the Tesla Model X or Model S in 2019. Just days after promising to cut prices of all its cars by $2,000 in response to the company blowing through its federal tax credits faster than a record producer with a bag of high-test cocaine, the company’s Chief Executive Tweeter has announced the discontinuation of the 75D X and S models.
This is in addition to Tesla cleaving off a number of color and interior trim choices last year. At the time, it was speculated the company was doing so in an effort to streamline production.
So Elon giveth, so Elon taketh away.
The doomed 75kWh versions of the big sedan and crossover come with a battery that permits a range of 259 miles for the Model S and 237 miles for the Model X. As of this writing, Tesla lists those machines for prices of $76,000 and $82,000, respectively, before any available incentives and curiously calculated “gas savings.”
A maxed-out, check-all-the-boxes Model 3 lists for $70,500 before any estimated savings, if you’re wondering.
Starting on Monday, Tesla will no longer be taking orders for the 75 kWh version of the Model S & X. If you’d like that version, please order by Sunday night at https://t.co/46TXqRJ3C1
— Elon Musk (@elonmusk) January 9, 2019
It’s a not insignificant $18,000 walk up the food chain to a 100kWh Model S from the 75, while the next most expensive Model X is $15,000 adrift from the base trim that’s being shelved. With this pricing structure, might potential Tesla buyers be willing to downgrade to a Model 3? Or will they simply make a beeline for the nearest Jag showroom to check out the I-Pace?
For its part, Wall Street was less than impressed with the largesse shown by Musk with the $2,000 haircuts on all models, responding by saying it’ll eat into the company’s profits and stoking fears that demand for Tesla cars has waned.
Tesla delivered just over 90,000 cars in Q4 of 2018, a new record for the company. That figure included about 63,000 Model 3 sedans. Total production was slightly lower at 86,555 vehicles, with the discrepancy driven by a large number of Model 3s that were seemingly in transit to customers. Recall that Musk tweeted his company was “building our own car carriers” back in September. Leave your thoughts about that tweet in the comments.
Apologies, we’re upgrading our logistics system, but running into an extreme shortage of car carrier trailers. Started building our own car carriers this weekend to alleviate load.
— Elon Musk (@elonmusk) September 24, 2018
Hacking away at the total number of configurations in which customers can buy a Model X or S may be a way in which Tesla can streamline production and put a lid on costs. Late last year, the company binned several interior color and trim combinations. Full leather interiors vanished ages ago (allegedly to satisfy vegan shareholders – I can’t believe I just typed that phrase).
If you’re on the fence about getting a 75kWh Model S or Model X, you have until Sunday night to pull the trigger.
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"Our own car carriers." Right, right.
Makes sense...the people whanting a "cheap" Tesla would likely go for the model 3. I'd expect a move upmarket when the S gets refreshed.