Tesla makes huge price cuts to Model S and Model X

Tesla finally announced the long-awaited (and long-promised) $35,000 base version of the Model 3 on Thursday, but the company also dramatically reduced the starting price of its other cars, the Models S and X. Each version of those cars now costs between $12,000 to $18,000 less than they did earlier this week.

The Model S now starts at $79,000. That base version is now called “standard range,” just like the Model 3. (In fact, Tesla has adopted the Model 3 naming convention for the Model S and Model X moving forward.) The standard range Model S will travel up to 270 miles on a charge, has a 140 mile per hour top speed, and can go from 0 to 60 mph in 4.2 seconds.

Above that, Tesla now sells a long range Model S for $83,000 that can go 335 miles, has a top speed of 155 mph, and does 0 to 60 mph in 4.1 seconds. This Model S previously cost $96,000. The Model S Performance, which has a 315-mile range, 155 mph top speed, and a 3-second 0 to 60 mph time, now starts at $99,000, down from $112,000. And the Model S Performance with “Ludicrous Mode” now starts at $114,000, down from $132,000. Ludicrous mode shaves the 0 to 60 mph time down to 2.4 seconds.

The cheapest Model X will now be the long range version, which starts at $88,000 (down from $96,000, and carries with it a 295-mile range, a top speed of 155 mph, and goes from 0 to 60 mph in 4.7 seconds. The Model X Performance starts at $104,000 (down from $117,000) and offers up to 289 miles of range, the same top speed, and the ability to hit 60 mph in 3.5 seconds. Model X Performance with Ludicrous Mode — which hits 60 mph in 2.8 seconds — now starts at $119,000, down from $137,000.

The price drops come less than two months after Tesla decided to stop making the Model S and Model X with a 75kWh battery pack, opting instead to only sell versions with a 100kWh pack. The 75kWh pack had powered the entry-level (and therefore most affordable) versions of the Model S and Model X, so that change in early January effectively raised the starting price of each car by between $15,000 to 18,000. Just days before that change, Tesla dropped all prices to help adjust for the fact that its cars are no longer eligible for the full federal tax credit for EVs.

In fact, the current entry-level Model S even uses the same 100kWh pack as the higher-spec models, even though it only has a range of 270 miles. That’s because Tesla is using software to limit the ultimate range of the car. The company has done this in the past; Tesla previously sold a Model S “70,” as in 70kWh, but the car actually had a 75kWh battery pack. This allowed the company to make fewer models while offering a more diverse product lineup. Tesla also allowed Model S 70 owners to pay to “unlock” that extra range if they wished, and buyers of the new standard range Model S will have the same option, according to the company.

Tesla was able to reduce prices on the Model S and Model X this week because it’s shifting all of its sales to online-only going forward, the company announced Thursday. As a result, Tesla plans to close “many” of its stores, and will the ones that remain in “high-traffic locations” will instead serve as “galleries, showcases and Tesla information centers.”

That will result in layoffs. “There’s no other way for us to achieve the savings required to provide [the $35,000 Model 3] and be financially sustainable,” Elon Musk said Thursday on a call with reporters. “I wish there was some other way, but unfortunately, it will entail reduction in force on the retail side. There’s no way around it.”

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