In a surprising move, Tesla has announced significant price drops for its Model X and Model S electric vehicles (EVs) just weeks before the end of the second quarter. The new incentives and discounts, implemented on June 17, aim to boost sales and clear excess inventory, while also enticing potential buyers with three years of free Supercharging.
Tesla has reduced the prices of the Dual motor and all-wheel drive versions of the Model X and Model S by approximately $8,000 compared to their prices just a week ago. The Model S, for instance, now carries a price tag of $82,790. Additionally, customers who purchase either of these EVs before the end of June will receive free Supercharging for three years.
These price cuts come on the heels of a $2,500 price increase for both models just two months ago, a move that perplexed investors and shareholders familiar with Tesla’s historical stance against discounts. However, recent delivery numbers indicated a decline in demand for the higher-priced Tesla vehicles, resulting in excess inventory. In response, CEO Elon Musk decided to prioritize stimulating demand over maintaining high profit margins.
The latest discounts on the Model X and Model S, combined with the complimentary Supercharging promotion, are part of Tesla’s ongoing strategy to address the demand shortfall. Moreover, the timing of these incentives, so close to the end of the quarter, is likely strategic. Tesla has maintained a steady production rate for both EVs since March, with the Model S listings continuing to increase since the beginning of June. By accelerating purchases before the next quarterly report, the company hopes to demonstrate the effectiveness of its demand-boosting tactics and alleviate concerns about its inventory levels.
Tesla’s commitment to adapting its pricing strategy and implementing incentives reflects its determination to maintain a competitive edge in the rapidly evolving electric vehicle market. As the quarter comes to a close, all eyes will be on Tesla’s sales figures and the impact these discounts will have on its overall performance.