Tesla Model S, 3, and X Gets Price Reduction In The US

Featured Image Credit: Tesla

Tesla lowered the price for its Model S, 3, and X models in North America. Tesla China also reduced the price for its imported Models S and X. 

According to Reuters, Tesla cut its prices for the Models S, 3, and X in North America recently as the Fremont factory ramps production. Based on Tesla's online configurators, the EV automaker adjusted the price of the Model 3 SR+, decreasing it by US$2,000. 

Thus far, only the price of Standard Range Plus dropped. The price of the Model 3 Long Range AWD and Performance were also reduced by $2,000.

Tesla also reduced the price of all its flagship variants by at least US$2,000-US$5,000 in North America--including the Performance models. The purchase price of the Model S Long Range Plus is now listed as US$74,990 and the Performance variant costs US$94,990. Meanwhile the price of Model X Long Range dropped to US$79,990 and the Performance's price was reduced to US$99,990. 

Global Times also reported that Tesla cut the price of the imported Model S and X in China by RMB¥29,000 or US$4,060. The MIC Model 3 variants made in Giga Shanghai did not get a price reduction. 

#Tesla says it will cut the price of its imported Model S and Model X cars in #China by 29,000 yuan ($4,060). The price of the made-in-China Model 3s is unchanged. Tesla is also reducing the price of all car models in North America. pic.twitter.com/o7KXcUpnEd

— Global Times (@globaltimesnews) May 27, 2020

Elon Musk and Tesla CFO Zachary Kirkhorn hinted that the company's price would drop in China during TSLA's Q1 2020 Earnings Call. Kirkhorn explained that as Tesla continues to improve its efficiency in Giga Shanghai's production, prices would drop. 

"The cost of vehicles produced in Shanghai in Q1 is already lower than the cost to produce the Model 3 in Fremont, and there's still significant opportunity left to take costs out. So fixed cost absorption from higher production volumes, which are occurring in Q2 and will occur through the rest of the year were not fully localized on the supply chain yet. 

"And so while a lot of the supply chain is localized, it's not complete, and there's additional opportunities there. And so we'll continue to bring the price down and expand margin -- costs down and expand margin even with this reduction in price that Elon mentioned on the standard range version of the vehicle," Kirkhorn explained.

Tesla's efforts to drive prices down don't only apply to China. One of Tesla's overall goals was to make electric vehicles more affordable and the recent price decrease is a step towards that direction.