Tesla has slashed the prices of the Model X and Model S once again, following an initial MSRP reduction earlier this year.
The big news involves the Model X Plaid and Model S Plaid, Tesla's high-performance models that boast some serious performance capabilities. First discovered by Twitter user @SawyerMerritt, these top-end derivatives now retail for $109,990. This makes the range-topping SUV and sedan $10,000 and $5,000 cheaper, respectively.
Initially, these variants were considerably more expensive. Before these two price cuts, the Model S Plaid cost a staggering $135,990, while the Model X Plaid was priced at $138,990. Tesla quietly updated the pricing, and it's safe to assume the mighty Plaid models will find even more buyers at these reduced rates.
We can't imagine buyers who forked out full price last year will be too happy about this.
While the Plaid twins have received the same pricing, it's a different story for the standard derivatives. The standard Model S now retails for $89,990, while the Model X can be had for $10 short of $100,000. This is remarkable, as the entry-level Model S is now cheaper than any iteration of the Mercedes EQS and closer than ever to the Air Pure, a more affordable version of Lucid's sleek sedan, which retails for $87,400.
Renault Group's Luca de Meo has previously warned against these massive price cuts, noting that "I think that a battle on pricing [for] electric cars right now, when we're starting operations, isn't the best thing that could happen to the industry. Because we have to invest, we have to generate a margin for electric cars. Otherwise, this will not become [a] very healthy business for the industry."
The initial spate of Tesla price cuts prompted Ford to cut pricing for the Mustang Mach-E, while Vietnamese automaker VinFast was forced to introduce incentives and promotions to remain competitive.
Tesla may have discounted pricing even further to fight off the competition, which might not be able to match the automaker's discounts. While the Model S isn't as luxurious as the EQS, the impressive performance, remarkable range, and low pricing could sway someone who was previously looking at the electric Mercedes.
It's the same story with the Model X, now cheaper than several German rivals. Whether competitors will respond with additional price cuts remains to be seen, but we think it's unlikely. Tesla has high-profit margins that can probably weather the discounts. The same can't be said for rival automakers who are still navigating their way through EV supply chains and parts shortages.