Published: Wed, July 17, 2019
Markets | By Otis Pena

Tesla drops Model X and S variants and cuts prices

Tesla drops Model X and S variants and cuts prices

All in all, Tesla's move here should really help simplify what had become something of a convoluted mess of its product lineup.

Tesla shares fell as much as 2.1 per cent to US$248.01 before the start of regular trading Tuesday.

Tesla Inc. cut the starting price of the Model 3 sedan in the USA weeks after a federal tax credit shrank in half, renewing concern over whether the electric-car maker can sustain sales with less support from incentives. Both Performance trims on the Model S and Model X cost $990 more than last week with the same range (345 miles and 305 miles, respectively). To take some of the sting out of it, the company also reduced the price of its now entry-level Long Range variants. On the other hand, the company's Model 3, Model X, and Model S cars have gone through some transformations as well.

Tesla has cut its prices to split the difference in cost to buyers after the federal tax credit on its cars dropped from $3,750 to $1,875 on July 1. The standard range previously sold for $81,000. The Performance models of both the cars will now feature the "Ludicrous" package as standard.

Tesla lowered prices for vehicles shipped to China to boost sales in the region, Bloomberg reported.

According to Reuters, Model X prices have been cut to 790,900 yuan ($115,068) and Model S to 776,900 yuan.

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The offerings represent Tesla's latest sales push after a second-quarter production and delivery record that defied skeptics and beat analyst expectations. The change won't impact prices of Model 3 cars that are produced in Shanghai, the representative confirmed to Bloomberg.

A Tesla spokesperson said the changes were created to simplify the company's offerings and improve affordability for customers.

"We are standardizing our global vehicle lineup and streamlining the number of trim packages offered for Model S, Model X and Model 3".

"We are also adjusting our pricing in order to continue to improve affordability for customers". The cheapest version available is now US$79,990, according to the company's website.

"Model 3 continues to outsell all other luxury vehicles in the US, with record delivery numbers in Q2 and continued global expansion to Europe and Asia", the statement continued.

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