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Tesla revealed its readiness to do everything to continue offering favorable car pricing and introducing price slashes when necessary.
Tesla Inc (NASDAQ: TSLA) has yet again slashed the price of its Model S sedan cars by about 3.5% as revealed by Chief Executive Officer Elon Musk. According to a report from CNBC, the Tesla price slash comes partly as a means to wade off competition from Lucid Motors who announced the pricing of its Lucid Air cars with a 406 mile EPA range at $69,990 in comparison with the Model S who EPA range is barely 402 miles.
Competitions like this are not uncommon in the growing electric vehicle market as companies look to take a fair share of the market. The revelation made by Lucid Motors forced Elon Musk to slash the price of the Tesla Model S Long Range car by 3.5% to $69,420 from the $71,990 it slashed it to barely two days ago.
The gauntlet has been thrown down!
The prophecy will be fulfilled.
Model S price changes to $69,420 tonight!
— Elon Musk (@elonmusk) October 14, 2020
The incessant reduction in the price of Tesla’s flagship sedan car, the Model S has been largely attributed to the need for the company to meet up with its total expected car deliveries for 2020 currently set at 500,000. For the past three quarters in 2020, Tesla’s total car deliveries as gleaned from each quarterly performance report are 318,350 vehicles, and the company will need to make about 180,000 car deliveries in Q4 to meet its set target.
While Tesla looks to sustain the better than expected performance it has recorded thus far in the COVID-19 ridden months that has hampered the global supply chain and conversely, the auto-delivery market. While the company’s price slash announced by Elon Musk will benefit more of their US customers, the company has announced an 8% price slash in its China-made Model 3 cars earlier this month to woo more of the company’s Chinese customers.
Tesla stock closed 3.28% higher on Wednesday but is currently down 2.67% in the pre-market at about $449 per share.
Tesla Price Slash Will Not Wade Off Competition
The company under Elon Musk has revealed it is willing to do anything to continue to be its customer’s delight with favorable car pricing and accompanying price slashes when necessary. Despite this, other emerging EV companies are ambitious in penetrating the lucrative markets and they can only do so by rolling out ingenious car designs with advanced functionalities and a much more affordable cost than what the market currently offers.
General Motors Company (NYSE: GM) who currently has a partnership with Chinese outfit SAIC churned out the compact electric microcar, the Hongguang MINI EV, which costs around $5,000. This product reported outperformed Tesla’s Model 3 vehicle sales in August, a situation that may keep recurring as the competition stiffens. In the meantime, the strategic price slash may help meet Tesla’s target in the near term.