Tesla has reduced the pricing of its electric cars across its entire lineup in the middle of the night – with thousands of dollars price cuts on some models.
The global pandemic and the lockdowns put in place to slow down the propagation of the coronavirus have ravaged the economy of most countries and the auto industry has been particularly affected.
In response, Tesla, who has rarely suffered from demand problems, has decided to reduce prices across its entire lineup of electric vehicles.
For Model 3, its cheapest and most popular car, it results in a $2,000 price cut across all powertrain options.
It now starts at $37,990 instead of $39,990 for the Model 3 Standard Range Plus:
It’s a new lower price for the vehicle – though Tesla has an “off-the-menu” version of the Model 3 starting at $35,000 with fewer options.
Model S, Tesla’s flagship sedan, has got an even greater price cut.
The Model S Long Range Plus now starts at just $74,990 – a $5,000 price reduction overnight:
The Model S Performance has also seen a $5,000 price cut. Tesla’s top performance car now starts at $94,990.
Same goes for the Model X.
Both versions of the luxury electric SUV have received $5,000 price cuts:
The Model X now starts at less than $80,000, which has been the case since Tesla was offering a smaller battery pack for the electric SUV.
Model Y, which Tesla just started delivering, is the only vehicle in the automaker’s lineup that hasn’t been affected by the price changes tonight.
The automaker still enjoys a backlog of orders on the smaller electric SUV since it has been taking reservations for a year and only started deliveries in March.
Tesla restarted production at its Fremont factory earlier this month after being forced to shut down due to the virus for the better part of March and April.
I think it’s a clear indicator that Tesla, like most other automakers these days, is having issues moving cars.
Even for those who haven’t lost their jobs or saw their income being reduced amid the pandemic, it’s hard to justify making a big financial commitment like being a new car in these uncertain times.
The only model not to get a price reduction is Model Y – likely due to Tesla still working through a backlog of orders. It would also have been a real blow to people who just took deliveries after having reserved for a year.
Tesla has also been working with a slim margin on Model Y since it just started production. It will definitely take a hit on the other cars, but its margins have improved so it likely can still make money on Model 3, Model S, and Model X with those price changes.
And it’s better than to have unsold inventory.