Published: Sat, March 02, 2019
Business | By Pearl Harrison

Tesla slashes Model S, X prices by up to $18K

Tesla slashes Model S, X prices by up to $18K

At a press conference overnight, the California-based electric vehicle (EV) manufacturer's chief executive, Elon Musk, announced the radical shift as part of a bid to deliver on a promise to make the brand's Model 3 saloon available for $35,000 (£26,400) in its home market.

Tesla has twice this year lowered the price on the Model 3, which now starts at $42,900.

That is why we're excited to announce today that we are now offering the standard Model 3 at $35,000. That could help win some people over, particularly since you'll get a chance to learn over a few days or a thousand miles if you're truly comfortable with the vehicle before you decide to actually buy it. "Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free".

It offers 355km of range, a top speed of 210km/h and a 0-60mph (97km/h) time of 5.6 seconds, while the Standard Range Plus will do a claimed 386km on charge, hit 60mph in 5.3 seconds and tops out at 225km/h. For $2,000 more, Tesla offers a version with a range of 386 km (240 miles) and a top speed of 140 mph.

The real question is, can Tesla make a profit selling a vehicle at $35,000? This model costs $37,000. Customers are becoming increasingly comfortable making purchases online, and that is especially true for Tesla - which is a testament to the products we make.

The announcement came after the US Securities and Exchange Commission (SEC) asked a US federal judge to hold Musk in contempt for violating a settlement deal reached in 2018. Additionally, Tesla is "shifting all sales online".

But despite the crisis of profitability now faced by auto manufacturers as they make the move into alternatively-fuelled vehicle (AFV) production, the online launch of the new Hyundai Kona EV quickly made it the Hyundai network's "most profitable vehicle", according to Whitehorn.

A small number of stores in high-traffic locations will remain as galleries, showcases and Tesla information centers.

The investor debate over Tesla's future is unlikely to end, even with the cheaper Model 3 finally here. At the same time, we will be increasing our investment in the Tesla service system and manufacturing, and I expect that headcount to grow next year.

Over the past year, the firm has shrunk the Model 3 battery, tweaked its manufacturing process, and reduced costs in other ways to hit the lower price, while still protecting profit margins.

- The long-awaited $35,000 version of the Tesla Model 3 is finally rolling out in the United States. "The vast majority of consumers want to do some combination of both online and traditional shopping for new vehicles".

Musk told the world there was news on the way via his preferred medium of obscure Twitter posts.

But Musk has his company following much of the same playbook, and that's asking for similar results.

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