Friday, March 24, 2023

Tesla again reduces its prices in the US to encourage demand

Tesla lowered the prices in the United States of its two most expensive vehicles, the Model X and the Model S, to encourage demand and due to increased competition in the sector.

The new base price for the Model X, an SUV, is $99,990, about 9% less than before. Meanwhile, the price of the Model S sedan is now at US$89,990, which represents a reduction of 5%.

In January, Tesla already reduced the prices of its vehicles in the United States and Canada between 6 and 20% to encourage sales.

In 2022, Tesla produced a total of 1,369,611 vehicles and delivered 1,313,851, which means that 4% of total production did not have a buyer.

But of Model X and Model S the company manufactured 71,177 units and only delivered 66,705 vehicles, which means 6.2% without a buyer.

The January reduction caused other electric carmakers to lower their prices.

Ford cut the price of the Mustang Mach-E electric SUV between 1 and 9%, depending on the version. The Mustang Mach-E was the third best-selling electric vehicle in the United States in 2022.

Following today’s price cut, Tesla shares traded lower in New York. Shortly before the markets closed, shares of the automaker lost 1.6% and traded at US$194.64.

Tesla CEO Elon Musk said last week that only prices are holding us back from selling more vehicles, because the desire to own a company car is so high.

“Even small price changes have a large effect on demand,” said the businessman after presenting the financial results for 2022.

Musk also stressed that one of Tesla’s key objectives in the medium term is to lower the costs and prices of its products.


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