Earlier this week, Tesla slashed the prices of a number of its vehicles: the Model X and S are now priced at $79,990and $74,990 respectively, for the base models, which is a drop of $5,000. The more expensive Performance versions of these cars have also witnessed a price drop of $5,000. The Standard Range Plus, which is the cheapest model of the Model 3, now has a price tag of $37,990, which means a $2,000 drop. All cars of Model 3 are now cheaper by $2,000, at least.
The prices for Model Y that was introduced this year has been kept the same. The closing stock price of Tesla also remained the same on the day after these announcements.
The fact that Elon Musk, the CEO of Tesla, had chosen to reopen the Freemont factory on 9th May suggests that there is high demand in the market. But, the price cuts are indicating the exact opposite.
Sale of all autos has dropped severely in the past two months, and Tesla is not the only one trying to attract buyers once more. Deferred payment plans, zero percent financing, and other such incentives are constantly being offered to the customers.
The underlying reasons for Tesla’s price cuts might have been clearer if the number of cars the company sold in the last two months could have been known. But, Tesla shares those numbers only every quarter.
There can be many explanations behind the price cuts. After all, Tesla is also under a lot of pressure, just like other carmakers, and it wants to meet the delivery goals. Tesla has to put out offers like other competitors to stay in the game. Moreover, Tesla depended on the strength of the economy and the federal tax incentives for the e-vehicles, and neither of those factors is working for it now.