Tesla Inc. reduced starting prices by $10,000 on its flagship models, the Model S sedan and Model X crossover, by introducing new versions with less battery range and slower acceleration, according to the company’s website.
The surprise move is the latest tactic by Tesla CEO Elon Musk to stimulate demand for the automaker’s aging lineup amid slower growth for battery-electric vehicles this year in the U.S., analysts say.
According to data from Experian, Model S registrations fell 55 percent in the January-June period — compared with the first half of last year — to 6,964. Model X registrations fell 5.8 percent to 12,341 for the same period, Experian said.
The new trims are dubbed “standard range” by Tesla.
The Texas-based automaker also cut prices in China on Monday for two trims of its Model Y compact crossover, the long range and performance models. The China price cuts amounted to $1,935 for each version, Reuters said.
In the U.S., Tesla said the Model S standard range starts at $80,130 with shipping, and has 320 miles of range. The regular Model S is rated at 405 miles and is now the middle trim.
The Model X standard range starts at $90,130 with 269 miles of range. The regular X is rated at 348 miles, according to Tesla’s website.
Tesla made the announcement late Monday on the social media platform X, which was previously known as Twitter and is majority owned by Musk.
The new configurations sparked debate on X Monday over whether the range ratings of the new base models were appropriate for Tesla’s flagship models, given their elevated prices even after big price cuts earlier this year.
Gary Black, managing partner of The Future Fund and a Tesla bull, said the Model S and Model X standard range “don’t seem like great value propositions. Range is light and 0-60 [mph] is too slow for $80K-$90K,” Black wrote on X.
Tesla quotes 0 to 60 mph for the Model S standard range at 3.7 seconds compared with 3.1 seconds for the regular trim. The performance Plaid trim has an official 0-to-60 mph time of 1.99 seconds and starts at $110,130 with shipping.
The Model X standard range is rated at 4.4 seconds to 60 mph, compared with the regular version at 3.8 seconds. The Model X Plaid goes to 60 mph in 2.5 seconds and starts at $110,130, Tesla said on its website.
The Tesla Model S and Model X are the latest vehicles in the automaker’s lineup to expand to three trims: standard range, long range and performance. The Model 3 sedan and Model Y also expanded to three trims from two this year.
In April, Tesla introduced a Model Y standard range as the base model. It has 279 miles of range compared with 330 for the long range and is $2,750 less expensive. The top-trim Model Y performance starts at $56,130 with shipping.
The automaker also brought back the Model 3 long range in May after suspending the trim in August 2022. Musk said at the time that the pause was needed to ramp production in order to meet strong demand.
Tesla’s expanded trim choices come as battery-electric vehicle supply is outstripping demand this year, leading to price cuts and growing sales incentives, analysts say.
According to first-half registration data from Experian, EV market share in the U.S. was flat at 7.1 percent after growing rapidly in 2021 and 2022.
Tesla led the EV market in the January-June period with 329,608 new registrations, a 44 percent rise over the year-earlier period. From the first quarter to the second quarter, new Tesla registrations increased 12 percent, from 155,360 to 174,248, the Experian data shows.
Tesla had the top two EVs in the six-month registration data, the Model Y at 201,434 and the Model 3 at 108,604. New Model Y registrations nearly doubled compared with the first half of 2022, and the Model 3 rose 12 percent, Experian said.