Ever felt like owning a Tesla Model X but the pricing was out of your range? Luck might be on your side today as Tesla has lowered the price of the Model X SUV to $79,500. That’s still not super cheap, but it’s better than the price before it.
Tesla says the reason behind the price drop has much to do with improvements in margins, which came about as the automaker prepares to ramp up production in a big way where the Model 3 is concerned. The lower-priced electric car is set to cement Tesla’s place in the auto market for a long time to come.
According to a report from Reuters, several analysts had concerns the Model X would suffer due to the cheaper Model 3, which is going for $35,000. Some auto buyers might find it to be a better deal to purchase a cheaper sedan rather an SUV that cost twice as much.
Elon Musk disagrees
Tesla’s CEO, Elon Musk, said in a statement that demand for the Model X is still high despite the cheaper Model 3.
“When we launched Model X 75D, it had a low gross margin. As we’ve achieved efficiencies, we are able to lower the price and pass along more value to our customers,” said Tesla in a statement on Friday when it announced it had lowered the price of the $82,500 Model X by $3,000.
For those who are wondering, the most expensive version of the Model X at this time is the P100D, and it goes for a cool $145,000. The price for that model isn’t coming down any time soon, not until Tesla has a replacement in mind.
Interestingly enough, Musk said the launch of the Model 3 had not caused a problem for either the Model X or the Model S. In fact, demand for both vehicles has increased due to the release of the lower-priced car.
Tesla Model 3 – a car for everyone
The pricing of the Model 3 is a clear sign Tesla has designed this product for mass market appeal. Before the Model 3, the company had only luxury vehicles on the streets, much to the envy of those who are unable to afford them.
There’s even a $44,000 version of the Model 3 that Tesla is using to compete with luxury sedans such as the Audi A4, BMW 3-Series or Mercedes C-Class.
With the launch of the Model 3, the electric vehicle market will no doubt experience a boost as consumers move to own the next big thing. Additionally, competitors will want a piece of the pie, which means they’ll launch products to compete directly with the Model 3 at cost and features.