Tesla Cuts Entry-level Model S and X in 'Streamlining' Effort

by Chad Kirchner

July 16th, 2019 4:21 PM

tesla cuts entry level model s and x in 8216 streamlining effort

Following up a record-breaking quarter for deliveries, Tesla is making changes to the models it offers and adjusting pricing to reflect the new lineup. It’s good news if you were looking for a high-end Model S or X, but if you were looking at the base model, you’re in trouble.

According to Automotive News, Tesla has cut their Model S and X variants that aren’t the “Long Range” or “Performance Models.” These are the most expensive units with the highest profit margin, but possibly also the slowest sellers in the range. In a statement, Tesla said, “To make purchasing our vehicles even simpler, we are standardizing our global vehicle lineup and streamlining the number of trim packages offered for Model S, Model X and Model 3.”

The new pricing on the Model X is $84,990 and $79,990 for the Model S. Tesla also lowered the Model 3 price to $38,990. That is, of course, before any incentives.

If this really sounds like a price increase to you, you’d be right. While cutting prices on the top tier models will ease the pain a bit, cutting the less-expensive models forces buyers into the higher trims by default. Perhaps Tesla just assumes that buyers will shell out more if they have to?

You could look at this move a couple of different ways. Streamlining production can save costs, which Tesla is always looking to do. But raising the prices also is a move that could be used to raise profits, and not just killing slow-selling versions. Depending on whether you’re an optimist or a pessimist, your opinion may vary.

What is clear is that Tesla is focused primarily on the Model 3. Elon Musk has already said there’s no refresh of the Model S or X coming, so these models get incremental updates but won’t get any major updates to prevent it from aging on the vine.

It’ll probably take at least a quarter to see if these changes had an effect on Tesla’s bottom line, however. So we’ll have to be patient to see if it worked.

[Image: Tesla Motors]

#Model3 #ModelCut #ModelS #ModelX #PriceCut #Pricing #Tesla

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5 of 28 comments

SCE to AUX on Jul 16, 2019

"If this really sounds like a price increase to you, you’d be right." You just finished saying the Model 3 price dropped. It's worth noting that the Model 3 sells 4x the volume of S&X combined. Pricing of the S&X isn't very relevant anymore.

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Brentrn on Jul 16, 2019

I am annoyed at Tesla putting in a large battery that adds weight but does not give full use unless you pay extra. They also include options that can only be activated with $$. They sell cars like EA sells games. I also don't see how they are going to sell their way out of the huge debt they keep kicking down the road. At $80K there are a lot of other luxury cars that require a lot less thought about how far you can drive in a day.

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- Mcs on Jul 17, 2019
  
  "At $80K there are a lot of other luxury cars that require a lot less thought about how far you can drive in a day." You can get a Model 3 Long Range and travel 1728 miles in a day. That's the record by a guy in Europe. That could probably be beaten in a Model S Long Range. That's about the distance between Boston and Oklahoma City I believe. So, what's the problem? Wait, don't tell me, I bet you have a daily coast-to-coast commute from LA to New York and back and an EV just won't do for you. Damn, you got me. https://electrek.co/2019/07/05/tesla-youtuber-breaks-24-hour-electric-car-distance-record/
  
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- Jaffa68 on Jul 17, 2019
  
  @mcs It could be beaten easily by virtually any ICE car, that's about 99.9% of cars on the road today and they would be able to use the heater or air-con. I wonder if he'll repeat the journey in the winter and tell us about it. EV's are less convenient for long trips than ICE cars, it's about charging infrastructure, charging time, range & passenger heating/cooling needs. It's a fact. EV's are perfectly good (better than ICE's in some ways) for commuting.
  
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- TimK on Jul 18, 2019
  
  @jaffa68 Just finished a week-long road trip through AZ, NM, and CO. Along I-25 we saw a few Teslas near Denver and Albuquerque, and zero away from the cities. I know, anecdotal, but it seems that few Tesla owners care to venture far from metro areas.
  
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