Elon Musk cuts Tesla Model S price twice in one week
Tesla CEO Elon Musk cut the price of the company’s flagship sedan, the Model S, for the second time within one week on Wednesday. He disclosed the price reduction in a tweet, which said: “The gauntlet has been thrown down! The prophecy will be fulfilled. Model S price changes to $69,420 tonight!”
Musk frequently demonstrates a love of juvenile humor by working the numbers “69” and “420,” references to a sex act and recreational cannabis use, into company-related commentary. The price for the lowest spec version of the Model S, the “long range plus,” was updated on the Tesla website Wednesday evening to $69,420.
The announcement via tweet followed pricing news from Lucid Motors, an electric vehicle start-up led by former Tesla exec Peter Rawlinson. Lucid revealed Wednesday morning that the base, or “elemental” version of their forthcoming Lucid Air electric sedan would cost $77,400 — or $69,900 after a U.S. federal tax credit worth $7,500.
Lucid has projected that the base model of their sedan will deliver an EPA estimated range of 406 miles per single charge. The Tesla Model S, which the company has been delivering to customers since 2012, boasts an EPA-rated range of 402 miles per charge.
The Model S purchase price dropped earlier in the week in the U.S. from $74,990 to $71,990. The latest Model S price cut represents another 3.5% off for prospective U.S. customers.
Credit Suisse analyst Dan Levy wrote in a note on Wednesday that “A full quarter of lower price post pricedown in late May,” was a negative for Tesla near-term.
Prices have dropped in China recently as well.
According to data from the China Passenger Car Association, Tesla deliveries in China amounted to 11,329 units in September, lower than its August sales numbers, but a number that put Tesla in the top three “new energy vehicle” makers, based on sales there.
GM, via its joint venture with SAIC in China, bested Tesla Model 3 sales in China in August with sales of their electric micro car, the Hongguang MINI EV, which costs around $5,000.
Tesla is currently gunning to deliver between 477,750 to 514,500 electric cars in 2020 worldwide, according to the most recent guidance from Musk at the company’s annual shareholder meeting. It was previously targeting deliveries of at least half a million vehicles.
Tesla reported deliveries of around 318,350 vehicles in the first three quarters of 2020. To reach its original goal, Tesla would have to deliver more than 180,000 vehicles in the fourth quarter. To reach its low-end goal, the company would need would need to deliver a record number 159,400 cars in the fourth quarter of a year in which auto sales have been dampened by the Covid-19 pandemic.
The company will be “hard pressed” to hit 500,000 deliveries for 2020, Credit Suisse’s Levy predicted, but concluded: “We would expect investors to look through it, as the longer-term growth narrative is intact.”