Tesla Slashes Model S and X Prices Amid Softening Demand

Tesla Model S Oct18

Tesla Model S (Credit: Tesla) Elon Musk announced at Tesla’s investor day last week that the company is now cutting prices on its top two electric vehicles, the Model S and Model X, CNBC reports. “The desire for people to own a Tesla is extremely high. The limiting factor is their ability to pay for a Tesla,” Musk said. The announcement follows four more cuts in the past two months, notably in January when the automaker slashed prices up to 20% after softening demand and a flurry of new models from competing traditional automakers has left Tesla’s lineup looking old.

The thing is, it is old. I first rode in a Tesla Model S in 2009 when it was a prototype and excitedly wrote it up for PCMag’s Gearlog. Fourteen years later, the car’s software, range, and some of its hardware have been upgraded and improved numerous times. But it’s still largely the same vehicle inside and out, with only the absence of a grille and the controversial new steering yoke being the most obvious difference to the untrained eye (although at least the yoke is optional now). And as any automaker knows, 12 model years is an absolute eternity for a car to remain on the market without a new platform and new styling. The Model X is on its eighth model year, the Model 3 is six, and only the Y is still newish enough to be within the realm of a normal platform generation for the industry.

The Model S now starts at $89,900, a $5,000 cut, and the performance Plaid trim level gets a 4% discount to $109,990. The Model X”s base price falls to $99,990, a 9% drop, and the performance Plaid version sits at $109,990, an 8% cut. As CNBC reports, neither car is a volume seller, as is to be expected at the top of the lineup. Both comprise just 4% of Tesla sales in 2022; the smaller, less expensive Model 3 and Model Y make up the other 96%.

Tesla Model X (Credit: Tesla)

The price cuts follow multiple big cuts over the past few months, notably in January when the automaker slashed prices up to 20%–this after Musk’s repeated assurances that discounts and incentives were a thing of the past. Some of the damage to Tesla’s reputation and market position appears at least tangentially related to his $44 billion purchase of Twitter, which he has since used to feature himself prominently and allow misinformation to thrive on the site, and that Tesla investors have labeled a distraction.

Additional setbacks have also plagued the company. A few weeks ago, Tesla announced it’s recalling nearly 363,000 vehicles over the potential risk of crashes thanks to its Full Self Driving (FSD) Beta software, after recently uncovered testimony from a 2022 court case related to a 2018 crash showed a Tesla engineer admitting that a widely promoted Tesla self-driving video was faked. Tesla also announced that it’s delaying Cybertruck mass production to next year, even though it’s already two years later than Musk’s original promise of a 2021 release.

Now read:

• Tesla Recalls 362,758 Vehicles Due to FSD Crash Risk
• Tesla Again Delays Cybertruck Mass Production to 2024
• Tesla Engineer Admits Autopilot Promotional Video Was Faked