Why Tesla and Elon Musk changed the Model S pricing
Tesla Model S is about to get a bit less expensive $69,420.
Tesla’s new pricing is not a quick gun retrieval or an implosive action that will answer the market competition. It was the plan from the beginning.
Elon Musk tweeted that the Model S sedan will soon be priced at $69,420. Initially, I thought that the price cut was likely in response to Lucid undercutting Tesla on pricing a few hours ago.
Musk declared, “The gauntlet has been thrown down.”
I didn’t even know what a gauntlet was until now, so thank you, Elon. I learned another thing from you. On that same day, Lucid announced that its entry-level sedan would cost $77,400 minus a $7,500 U.S. tax credit, which brings the effective price down to $69,900.
With Tesla’s new price of $69,420, it would be the second Model S price cut. Earlier this year, Tesla cut $2,000 off the starting price of the Model 3. Lucid Air is shaping up to be a severe contender to Tesla’s Model S. Frankly, besides the technical aspect of the comparison, it is for me right now. The Air is a bit more exciting than the Model S. It has more Mistry in, such as the Model S had when it first launched. It is priced today the same as the Model S’s 400+ range. And while the Model S still has the same overall shape and feel since its 2012 introduction, the Air is also lighter, faster, and, as I said, newer.
The Air would be available at a price that is lower than $80,000. Though today’s pricing is hard, it puts the Lucid Air in the same price range as a well-equipped mid-sized European sports cars and, more importantly, the Tesla Model S.
Now, after we understand where it started, let’s think: Where is it all headed?
Just a few days ago, Musk tweeted: “Tesla should really be thought of as roughly a dozen technology startups, many of which have little to no correlation with traditional automotive companies.”
Musk says Tesla never stopped being a startup, and there are a dozen startups in Tesla. Musk views every product line as a standalone startup. It’s a bottom-up mentality and a fascinating point of view from the top of Tesla.
Outside of vehicles and manufacturing, such as batteries and chips, Tesla has its eyes on insurance. According to Musk, the insurance business could grow into 30–40% of Tesla’s car business.
Tesla wants the consumer to have a different experience, and providing insurance works well for this strategy. Tesla has already declared on their “secret” plan that they will create affordable pricing and know they are taking action.
By being a chain of startups, as Musk said, Tesla can move fast while it is still growing. Not only that but also Tesla can grow as a much more diverse company. And while it started as an autonomous car and battery manufacturer, soon they will provide the total consumer package.
