By Tesla has once again taken a strategic step toward increasing sales by introducing more budget-friendly versions of its renowned Model S and Model X electric vehicles. While these new cars come at a lower price tag, there is also another motive behind these new options.
Tesla enthusiasts can now find standard-range versions of the Model S and Model X listed on the company’s official website. Priced at $78,490 and $88,490 respectively, the standard-range models are $10,000 cheaper compared to the earlier versions. Furthermore, they are slated for delivery between September and October.
The newly released standard-range Model S boasts an impressive estimated driving range of 320 miles, while the Model X offers a range of 269 miles. It’s important to note that the base models offer even higher ranges with 405 miles for the Model S and 348 miles for the Model X.
Tesla has made several price reductions throughout 2023 to stimulate demand, the latest being some of its Model Y trims in China. These price adjustments have yielded remarkable results, with Tesla delivering a staggering 890,000 units in the first half of 2023, marking a 57% increase compared to the previous year. However, it’s worth mentioning that these price cuts have impacted profit margins. In the first half of 2023, Tesla reported operating-profit margins of 10.5%, a decline from the 17% reported in the same period in 2022.
To clarify, the introduction of these standard-range options should not be mistaken for a mere price cut. Instead, these are entirely new versions that were previously not available for purchase.
Tesla Expanding Product Lineup with Shorter-Range EVs
Market Demand for Shorter-Range EVs
There is a growing market demand for shorter-range electric vehicles (EVs), which could indicate that Tesla drivers are not experiencing range anxiety—the fear of running out of battery power with no charger nearby. This demand suggests that Tesla’s extensive network of fast chargers in the U.S. is alleviating any concerns about limited range. Additionally, having smaller batteries in these EVs helps reduce their price, making them more accessible to a wider range of customers.
Battery Supply & Standard-Range Versions
Another reason for Tesla to offer standard-range versions of their EVs is the availability of battery supply. Tesla utilizes lithium-iron-phosphate (LFP) batteries from China’s Contemporary Amperex Technology Co Ltd (CATL) for some of their standard-range models. As battery supply increases, it can lead to lower prices, making EVs even more affordable. Unfortunately, Tesla has not provided any comments or information regarding these new versions or battery supplies.
Stock Performance and Future Outlook
In premarket trading on Tuesday, Tesla stock was down 0.7% at $238.10. Meanwhile, S&P 500 and Nasdaq Composite futures saw declines of 0.6% and 0.7% respectively. Despite this, Tesla shares have experienced an impressive 95% surge this year, showcasing the company’s strong performance in the EV market.
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