By on July 16, 2019

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]

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28 Comments on “Tesla Cuts Entry-level Model S and X in ‘Streamlining’ Effort...”


  • avatar
    cprescott

    I can understand why Tesla is doing this, but this is a classic bait and switch operation where this company implored thousands to put down deposits on the Model 3 and they said they’d build an affordable model. Clearly this company is not concerned with ethics so they’ll just do what a desperate company in danger of going belly up would do – build and sell the most expensive product they can and know that fools who buy a Tesla will pay for this.

    One thing has struck me about Tesla – none of the people who say how much money they save on electricity over gasoline ever mention the outrageous insurance rates you pay for these cars. Tesla intentionally makes it difficult to repair by limiting parts availability and any accident that would take a couple of weeks to repair on a real car take months on a Tesla – not because of any inherent sophistication of the car, but because Tesla is a company that still isn’t functioning like a real company – parts go missing in transit (they never were shipped) and they ship you the wrong part and the delays in a poorly managed company set you back a month or more. After the dust settles, you are likely to never ever save a dime with a Tesla over a car of the same size and features (and Tesla’s are not luxury cars).

    • 0 avatar

      The level of carping about not being able to get normal parts (lights, fenders) when life happens on the road is amazing-also, there are some issues with one of the computers (wears out after a certain number of read-write cycles) and the screen…which is important if the screen is the whole control center.

      • 0 avatar
        EGSE

        @Speedlaw “wears out after a certain number of read-write cycles”

        That sounds like flash memory wear failure. Any competent engineer designs in much more memory capacity than is expected for normal operation; that allows subsequent writes to be shifted around to even out the use per cell. It’s called “wear leveling” in the engineering trade. Some flash cells can reach end-of-life in as few as 1000 write cycles (depends on the device). Just for example, that could be less than 3 years if there’s one write op per day to the same memory cells every time.

        Going on speculation here…..if this is what it is, it’s an egregiously poor design and to this engineer, is unforgivable.

        If you have any information I’d be interested to know more. I’ll check the EE blogs I hang out on.

    • 0 avatar
      SCE to AUX

      @cprescott:

      Few – if any – Tesla buyers say they bought the car to save money. You obviously aren’t their target market, and you clearly don’t understand those who are.

      • 0 avatar
        Lockstops

        @deanst: “Today’s ICE cars are engineering disasters, as amply demonstrated by the fact that even after all this time it’s STILL not possible to fully fuel them as you sleep at home, like one can do with BEV-powered cars.”

        That is incorrect. It is completely possible to fuel ICE cars as you sleep at home. Absolutely is.

        Actually, it’s completely possible to fuel ICE cars as you sleep at home. There is the possibility to home-fuel CNG vehicles with natural gas or biomethane (made from waste and which is actually not only zero-emissions but _decreases_ greenhouse gas emissions!). For a very long time there has been the option for homes which are in the natural gas / biomethane grid (the two are mixed in the same distribution system and then consumers can purchase either one they want at their different prices) to fuel their vehicles themselves. There have been home fueling devices for sale for a very long time, I believe for decades already. They are slower than public fueling devices, so in that way are similar to electric chargers. They save energy by not using such high pressure so it takes longer to fill up, but you’ll still easily have it done by the morning. And there’s always the backup option to go and fill up the tank in minutes in a public filling station or then you can equally just use gasoline normally, so there is no range anxiety or inconvenience in operation.

        Then there is of course always the possibility to have a gasoline, diesel or E85 tank and pump installed on your property and use those for fueling your ICE cars at home. Not easy permit-wise I guess, but completely possible.

        There is also the (stupid) business model some are trying out where a mobile fuelling service comes over to your house and fuels up your vehicle.

        (BTW diesel and gasoline powered cars are often in a many scenarios, geographical areas and in cases of certain types of vehicles and user profiles much more environmentally friendly than BEVs too. In very very many cases they are equally as environmentally friendly as BEVs. And at worst are only marginally less environmentally friendly than BEV cars. Ok, maybe in some very rare handfuls of cases the BEV option is noticeably more environmentally friendly.)

    • 0 avatar
      jaffa68

      …And the CEO is forced to have his tweets vetted by a lawyer for lies as part of the settlement with the SEC to avoid a fraud charge. Since then, of course, the tweets have slowed but the rate of ‘leaked’ emails has increased. It’s hard to keep a good fraudster down.

  • avatar
    indi500fan

    Musk said the value of these cars will skyrocket in 2020 when they can be used as part of the Tesla robotaxi network. That bonus income will help pay for rust repairs too.

    • 0 avatar
      Lockstops

      So is Musk shorting all other car companies, bus manufacturers, taxi companies, etc. like crazy?

      If he would believe his own bullcrap then that’s what he would be doing. But he doesn’t put his own money where his big mouth is, he only shovels other peoples’ money down that black hole…

  • avatar

    Straight from the Brown Manual Diesel Wagon (BMDW) division, the base version of each car has been built, once, a combination of production line issues and random bad luck. Oddly, it was build # 420 for each production line. Beyond that, the $35k Tesla was last seen transporting Bigfoot out of Yellowstone Park, followed by a Model Y prototype.

    I’m a glutton for punishment, having had three diesels, but not even I can sign up for this….

  • avatar
    dal20402

    A feeling that Elon Musk is too unstable to trust for long-term support was one of several factors in our decision to buy a Bolt rather than a Model 3. Each decision like this, which is inevitably followed by a reversal a few months later, confirms that the feeling is right.

    • 0 avatar
      vvk

      You sure it wasn’t the huge discounts?

      • 0 avatar
        dal20402

        All of the above.

        – Price, influenced by nearly $10k off MSRP for the Bolt
        – Interior design (both feel cheap, but the Bolt is more usable)
        – Ride quality
        – Build quality on the examples we saw
        – Tesla design too conspicuous and showy
        – Wish for assurance of parts and service support by the end of the loan term

    • 0 avatar
      ajla

      You bought a Bolt? You and your family must have enviable BMIs to be comfortable in those front seats.

      • 0 avatar
        blockmachining

        We bought a 2018 Bolt LT. We simply love it. The front seats are a little narrow; however, after about 10,000 miles, the cushions have flattened out a little and feel better. Our fuel costs fell from twelve cents a mile to less than two cents. I cannot even tell you how much a gallon of fuel costs. My scheduled maintenance is just tire rotations. It texts you when you are fully charged, charge interrupted and if it’s too cold and etc. I could just go on and on. Try one. I bet you would love it too!

        • 0 avatar
          ajla

          I have driven a Bolt (it, the 2G Leaf, and the 330e are the things with a plug I’ve actually driven).
          The EV part of the Bolt was well done, but I was uncomfortable in the seats, and I’m quite the slave to sharp sheetmetal & RWD so a cheerful FWD hatchback isn’t really my style.

          The Model 3 is an option but I have the same concerns about the brand that others have mentioned in this thread. I also don’t like that RWD is only available on the slowest & most basic model with the worst range.

          • 0 avatar

            I drove a Bolt too, and considered it. Great runabout, but by hour four in the car I’d hate the seats and the sparseness….all the money went to the battery pack, and it’s a Cruze (?) otherwise…. My use case would allow BEV, since I know my distances in advance, and most days the BEV would be just fine…but in the NYC area, 14 miles can take an hour….so there is a LOT of seat time per distance vs say, Texas…..and the Bolt was too econo inside. I’m trying to get my wife to accept one as our second car, though !

      • 0 avatar
        dal20402

        Eh, it’s for city use. Most trips in it are less than 20 minutes. I’m 5’10” 205 (all in the torso) and I fit fine for that purpose, although the seats are not the most comfortable ever. My wife is 5’3″ 115 and has no complaints.

        The rest of the car is an entertaining little roller skate. It’s easy to fry the low-rolling-resistance front tires on demand, and instant EV torque means you win most low-speed drag races even against fast ICE cars. The low center of gravity makes it feel agile despite 3600 pounds of weight. Just 69 inches wide means it fits in every parking spot with plenty of room to open the door. One little oddity given the cheapness shown in most of the car is that the dual-HID headlights are outstanding, some of the best I’ve ever used.

      • 0 avatar
        Lockstops

        Yeah, if they would be completely out of shape slobs then they’s have to buy a SPORTS ACTIVITY VEHICLE instead… Oh the irony.

    • 0 avatar
      SCE to AUX

      Ioniq EV here, Tesla stability being a major factor.

      • 0 avatar
        mcs

        @SCE: I have a Tesla Independent shop and salvage guy not far from me. I’m not as worried. If they went away, I could keep the car going.

        I saw the specs and prices on the Taycan. It’s definitely more of an upgraded Model 3 than an S. I’m still thinking about a Model 3 with the aftermarket suspension and carbon-ceramic brake upgrades vs. Taycan. I could maybe add a standard plus to the garage as a DD and still save a ton of money. The Taycan might be a lot of money for what seems to be just what are effectively cosmetic upgrades. I’m an engineer. Cosmetics aren’t my thing.

  • avatar
    SCE to AUX

    “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.

  • avatar
    brentrn

    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.

    • 0 avatar
      mcs

      “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/

      • 0 avatar
        jaffa68

        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.

        • 0 avatar
          TimK

          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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