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Tesla cuts prices and simplifies its product line



 A Model 3 at a Tesla showroom on March 1, 2019 in California
Enlarge / A Model 3 at a Tesla showroom on March 1, 2019 in California

Justin Sullivan / Getty Images

Tesla implemented across-the-board price cuts for its vehicles on Monday, making most versions of the Model S, Model X, and Model 3 more affordable. At the same time, Tesla eliminated the most affordable versions of the Model S and Model X, called Standard Range, from its product lineup.

The price of the Long Range Model S (now the cheapest model S) dropped from $ 85,000 to $ 79,990. The Standard Range Model cost $ 75,000 before it was discontinued.

The price of the high-end Model S Performance model actually increased from $ 96,000 to $ 99,990. However, that reflects the fact that "Ludicrous Mode" is now included as a standard feature for the Performance model. Previously, "Ludicrous Mode" was a $ 20,000 upgrade on top of the performance model's $ 96,000 base price.

Tesla's Model 3 also saw across-the-board price cuts . The entry-level Standard Range Plus model falls from $ 39,500 to $ 38,990. The Long Range Model 3 falls from $ 49,500 to $ 47,990. The Performance Model 3 has its price slashed from $ 59,500 to $ 54,990.

The result is a more streamlined product lineup with more clear-cut differentiation between the affordable Model 3 and the premium Model S and Model X. Last week, a Performance Model 3 with all the bells and whistles could cost almost as much as an entry-level model S. Now there's a much larger gap between the most expensive model 3 — the performance model starts at $ 54,990 — and the cheapest model S at $ 79,990. [19659009] The federal tax credit for Tesla vehicles is declining

One factor behind the US-based price cuts may have been the gradual expiration of the electric vehicle tax credit the federal government provides to customers. Until the start of 2019, every Tesla buyer got $ 7,500 back from Uncle Sam. That amount fell to $ 3,750 on January 1 and to $ 1,875 on July 1. It will go away altogether at the end of 2019. For Tesla's more expensive models, the price cuts more than offset the July 1 reduction. For the cheaper model 3 versions, it will at least partially offset it.

Tesla's price cutting isn't limited to the United States. Tesla cut prices in Europe and China, too. The model 3 performance got a 14 percent price cut, from € 65,580 to € 56,370. Still, the new price is equivalent to $ 63,000. So even after the latest price cuts, the model 3 is still much cheaper in the United States — a reflection of the value-added tax that is included in the European sticker price.


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