Tesla just slashed prices by nearly 8% and dropped some models in a bid to simplify its lineup
- Tesla has slashed prices for many of its vehicle offerings, while discontinuing some standard versions.
- The company said the move will help improve affordability and simplify its lineup.
- Wall Street analysts remain concerned that demand may be softening for Tesla's cars.
- Shares of Tesla sank as much as 2% following the shakeup.
Tesla has slashed the price of its cheapest car, the standard range Model 3, while discontinuing other base models in a bid to simplify its lineup, the company said.
In the United States, the standard Model 3 now begins at $38,990 according to Tesla's website, down about $100 from $39,900 last month. The long range and performance versions of the car now cost $47,990 and $54,990, respectively, down from $49,900 and $59,900 last month.
The company also discontinued the standard version of its Model S and X vehicles. The cheapest version of the Model S sedan, the long range, now sells for $79,990, or about $4,000 more than the base model previously cost. The price cut for the long range is just over $5,000. The performance version of the Model S now sells for $92,115, down from $96,000.
The standard range Model X has also been cut from Tesla's lineup, with the lowest-priced version of the SUV now selling for $84,990, down from $91,000. The standard range previously sold for $81,000. The Performance version of the Model X, on the other hand, has increased to $104,990 from $102,000.
Prices and lineups also changed in China.
According to Reuters, Model X prices have been cut to 790,900 yuan ($115,068) and Model S to 776,900 yuan. In its first quarter update letter, Tesla said it expects its new China factory to come online in the last quarter of this year. Pre-orders for Shanghai-built Model 3's have a starting price of 328,000 yuan ($47,678).
A Tesla spokesperson said the changes were designed to simplify the company's offerings and improve affordability for customers.
"In order to make purchasing our vehicles even simpler, we are standardizing our global vehicle lineup and streamlining the number of trim packages offered for Model S, Model X and Model 3," the company said. "We are also adjusting our pricing in order to continue to improve affordability for customers. Like other car companies, we periodically adjust pricing and available options.
"Model 3 continues to outsell all other luxury vehicles in the U.S., with record delivery numbers in Q2 and continued global expansion to Europe and Asia," the statement continued. "It has also achieved 5-star safety ratings in the U.S. and Europe."
Wall Street analysts, meanwhile, worry the price cuts could signal softening demand for Tesla's vehicles.
"The key question remains -- will Tesla be able to sustain itself given steadily declining ASPs and worsening mix?" Arndt Ellinghorst, an analyst at Evercore ISI, said in a note to clients reported by Bloomberg.
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- Tesla's largest outside investor has long been tight-lipped on Elon Musk. That's starting to change.
- Tesla reportedly plans to expand its production capacity in Fremont, according to a leaked email
- 3 former Tesla workers go on the record with claims they were fired after falling pregnant, taking childcare leave, and making a phone call