Tesla is taking across-the-board price cuts on its electric vehicles to prop up sagging sales — slashing the sticker price of its most expensive models by more than $20,000, even as it cuts lower-end models as much as 20%.
The Model S Plaid, which previously cost $135,990, will now set the consumer back $114,990 — a 15% discount worth $21,000.
Tesla also cut the price of its Model X Plaid from $138,990 to $119,990 — a 14% reduction.
Those on a tighter budget who have dreamed of owning a Tesla could splurge for a Model Y, the price of which was reduced by 20% — to $52,990 from $65,990.
A Model Y Performance, which previously cost $69,990, will now set you back $56,990.
The new figures were reported by Bloomberg News.
The price changes for Model 3 sedans and certain Model Y SUVs are significant in that buyers can now qualify for the $7,500 electric vehicle tax credit.
Under the old price plan, Model Y buyers didn’t qualify for the tax credit because the price exceeded the cap of $55,000.
Tesla CEO Elon Musk reportedly grew upset when the Biden administration issued guidelines last year that disqualified Model Y buyers from the tax credit because the car didn’t weigh enough to be considered an SUV.
The Model Y was thus subject to the $55,000 price cap that applies to sedans instead of the $80,000 threshold for SUVs.
On its website, Tesla notes that some customers are now eligible for the $7,500 federal tax credit on vehicles that will be delivered through March.
Tesla’s reduction in prices of its US models follows similar cuts in Germany, the United Kingdom and France.
The electric car maker also significantly slashed prices in its Chinese market — the second time it had done so in the last three months.
Shares of Tesla were down nearly 5% at $117.61 in early Friday trades.
In the past year, Tesla’s stock price has fallen by more than 64% as high inflation has curbed demand for its electric cars. The company is one of many blue-chip tech stocks that have been battered by the unhospitable economic climate.
Tesla investors have been particularly irked by Musk, who seems to be preoccupied in recent months by his $44 billion acquisition of his favorite social media platform, Twitter.
Next week, Musk is scheduled to stand trial in a civil lawsuit filed by Tesla investors who accused him of making false and misleading statements on Twitter in 2018 that artificially inflated the company’s stock price.
Musk is set to testify in the trial about his behind-the-scenes efforts in 2018 to line up financing to buy out the electric vehicle maker.
Tesla shareholders who filed the suit are seeking billions in damages.