Luxury electric major Tesla Inc. has slashed prices of its Model S sedan and Model X SUV vehicles in the United States, aiming to boost demand.
The price cut comes for the second time this year after the company drastically cut prices in January in a bid to boost sales.
According to the company’s website, around $5,000 was reduced on Model S price and around $10,000 on Model X vehicles.
The Model S all-wheel drive now costs $89,990, compared with $94,990 previously. Model S Plaid is now priced at $109,990, lower than $114,990 earlier.
Model X all-wheel drive costs $99,990, down from $109,990 earlier, and Model X Plaid is now $109,990, lower than the previous price of $119,990.
Amid slowing demand for electric vehicles, recession fears and higher interest rates, Tesla in January had reduced its electric vehicle prices in the United States and Europe, nearly a week after it slashed prices at its biggest international market in China.
In the U.S., the prices were cut on the Model 3 sedan, Model Y crossover SUV, Model X luxury crossover SUV and Model S sedan. In Germany, prices of Model 3 and the Model Y were cut. The vehicle prices were also reduced in Austria, Switzerland and France, as well as in South Korea, Japan, Australia and Singapore.
Musk earlier had hinted that Tesla could lower prices of its vehicles to sustain volume growth. At the company’s March 1 investor day, Chief Executive Elon Musk said the recent price cuts had improved demand of those particular models.
Musk, at the event held at Tesla’s factory in Austin, Texas, had said, “The desire for people to own a Tesla is extremely high. The limiting factor is their ability to pay for a Tesla.”
Tesla engineers added that the company would cut assembly costs by half in future generations of cars.
Despite significant COVID and supply chain-related challenges throughout 2022, vehicle deliveries in the year grew 40 percent year-over-year to 1.31 million, while production grew 47 percent from a year ago to 1.37 million.
Tesla, whose largest individual shareholder is Musk, had lost much of its stock value last year due to a sell-off following Musk’s $44 billion acquisition of troubled social media platform Twitter, along with weakness in tech market.
However, with demand growth for its electric vehicles after the recent price cuts on several models, the car company has been showing strength recently amid the signs of economic recovery.
Following the surge in the luxury electric car maker’s stock price, Musk recently regained his title as the world’s richest person, according to Bloomberg billionaires Index.
In its recent fourth quarter, Tesla’s profit jumped around 59 percent to $3.7 billion, with a 37.2 percent rise in revenues to $24.32 billion.
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