With the release of the updated Model 3, Tesla has eliminated the Standard Range versions of Model S and Model X and reduced the price of the Long Range versions. The Long Range version of Model S is now priced at $74,990, a 15% decrease from $88,490, and the Long Range version of Model X is now priced at $79,990, a 19% decrease from $98,490. These two models account for only 4% of total sales.
Analysts speculate that this price reduction aims to address low demand and qualify for the IRA subsidy, as the price has been lowered to below $80,000.
In addition, the price of FSD has been reduced from $15,000 to $12,000, which has sparked criticism as it contradicts Elon Musk’s statement that FSD will increase Tesla’s value. This has resulted in a 6% drop in Tesla’s stock price. It undermines the claim that vehicle prices will reach $100,000 to $200,000 due to the increased value brought by FSD.
FSD is estimated to account for 8% of Tesla’s total sales and less than 15% within the US. This may disappoint users who have already purchased FSD.
Ultimately, the price reduction of Model S and Model X can be interpreted as Tesla’s attempt to address the low demand for high-end models.
On the other hand, rumors suggest that Tesla will start advertising in mainstream media, which can be interpreted as a response to the recent issues with Tesla’s demand.
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