Ahead of the release of the highly-coveted Cybertruck and an expected debut of the simplified Model 3 Highland, Tesla has also shared new trim offerings for its Model S and X in the U.S. The automaker has added a third “Standard Range” trim for both its premium sedan and SUV, each of which also comes with a much lower sticker price than their higher-trim versions.
Tesla has debuted new Standard Range trims for its Model S and Model X vehicles, as can be seen on the company’s order configurator for each vehicle (via CNBC). Both now come at sticker prices that are $10,000 cheaper than the previous entry-level models, along with reduced range ratings. As a result, you can now buy a Model S sedan starting at $78,490 or you can get a Model X SUV for $88,490, with estimated ranges of 320 miles and 269 miles, respectively.
The Model S and X were Tesla’s first two mass-produced vehicles launched by the company, and they have gone through multiple subtle redesigns over the last decade or so. The current shift toward lower-ranged, more-affordable versions of the vehicle come ahead of Tesla’s launch of the Cybertruck, which is set to hit mass production next year, with initial deliveries happening later this year.
It also comes as Tesla seems to be preparing a launch of the Model 3 Highland, a simplified version of the company’s economy-level sedan. The vehicle has been widely reported, despite Tesla attempting to keep its launch quiet, and it’s expected to have fewer components and a lower price tag.
Tesla has been lowering prices on its vehicles throughout 2023. While the price cuts have stoked demand, some investors have been concerned about the company’s profit margins falling over the last several quarters. In the second quarter, Tesla reported 9.6 percent operating margins, which were the lowest in the last five quarters. Still, the company’s price cut strategy has seen demand remaining strong, while additionally putting pressure on other automakers to follow suit.
CEO Elon Musk explained the strategy earlier this year during Tesla’s Q1 earnings report, when he stated hopes to retain market share among the growing competition in the electric vehicle space; even at the short-term cost of reduced margins. Musk explained that the company is seeking the highest sales volumes possible, with the expectation that future profits through autonomy would be significant — and would seemingly justify price cuts in the long run.
“We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin,” Musk said during the call in April. “However, we expect our vehicles, over time, will be able to generate significant profit through autonomy. So we do believe we’re, like, laying the groundwork here, and that it’s better to ship a large number of cars at a lower margin, and subsequently, harvest that margin in the future as we perfect autonomy. This is an extremely important point.”
Originally published on EVANNEX.
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