Teslas are still on sale. According to Reuters, the company lowered its prices in the United States for the fifth time this year. Elon Musk's company reduced the cost of several of its cars by 2-6%.
The Model S and Model X, the autocompany's two most expensive cars now cost $5,000 less than what they did at the beginning of March. These are not the only vehicles that have been discounted. As reported by Business Insider, the prices for Model 3 and Model Y cars were also cut by $1,000 and $2,000 respectively.
The company's website shows that the Tesla Model S now costs $84,990. Just a month ago, the same car cost $89,990. The same is true with the Model X. Its price was reduced from $99,990 to $94,990 in only 30 days.
This strategy seems to be working for the Austin, Texas-based company. As reported by AP, Tesla increased demand for its vehicles in the first quarter by 36% after reducing the cost of several of its models. The company said that, from January to March, it sold 412,180 Model Y and Model 3 vehicles. This figure is considerably higher than the 295,324 cars sold in the same period in 2022.
It's not all good news for Tesla. While it managed to increase sales of two of its vehicles by 36%, the same did not happen with the Model X and the Model S vehicles. According to AP, sales for these models dropped by almost 38% and only managed to get a total of 10,695 vehicles from those ranges off the factory floor.
Tesla also reduced its prices in January
This is the fifth time Elon Musk's company has lowered the prices of several of its cars. USA Today reported that in January the company lowered the prices of several of its vehicles by 20%. This time, the price drop only affected the United States and was part of Tesla's strategy to allow some of its cars to benefit from a tax credit for electric cars.
Elon Musk claimed that the price drop is mainly due to the demand for Teslas and the money people want to invest in these cars. On Tesla's investor day, he said that the main problem is affordability. He also said that it is a real problem for the company because many people still want to own one of its electric cars: "The limiting factor is their ability to pay for a Tesla," he said.
He made the same argument a few days ago on Twitter, the social network that he owns. There, again, he reaffirmed that the problem is not so much the cars themselves, but the price that the potential buyers can pay:
So many well off critics don’t understand that demand at scale is limited by affordability.
There is plenty of demand for our products, but if the price is more money than people have, that demand is irrelevant.
— Elon Musk (@elonmusk) April 7, 2023
