The price cuts come less than a month after the updated versions launched.
Just last month, Tesla gave the Model S and Model 3 some significant updates, including a new drivetrain with an improved range, suspension upgrades, and an improved charge rate. Model S and Model X Long Range variants now achieve 370 miles and 325 miles respectively on the EPA cycle.
Before the update, they were rated at 335 miles and 295 miles, respectively. As part of the update, Tesla also brought back the ‘Standard Range’ option for both models, with the Model S offering a range of 285 miles on a single charge and the Model X delivering 250 miles.
Less than a month later, both models have been given a significant price cut. The Model S has been reduced by $3,000 and the Model X by $2,000. This means the Model S now starts at $71,250 while the Model X starts at $71,950. These prices do not include federal and state tax credits.
In a statement, Tesla said it periodically adjusts prices and available options like other car companies and that the decreases offset price increases from a month ago when Tesla offered longer battery range and added a new drive system and suspension. However, Tesla didn’t say if slowing sales influenced the decision.
These price changes come at a time when Tesla is under pressure from investors concerned about the company’s inability to turn a consistent profit and keep the car manufacturer growing while also developing a self-driving ride system and building new cars such the Model Y, an electric pickup, the new Roadster, and an electric Semi. It's a precarious balancing act, to say the least. Tesla stock has also fallen from $262 per share on April 22 down to $205 as of May 20 according to CNBC. This is also down significantly from the $376 which Tesla shares reached in December 2018 and significantly down from the record-high of $383 reached in the middle of 2017.
"The business fundamentals of Tesla always have been shaky, but the stock price has been buoyed by the story that this is a company that was going to do huge things,” said Navigant Research analyst Sam Abuelsamid. "What we’ve seen in the last month or so is people are starting to recognize maybe that wasn’t really true.”