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Tesla has announced yet another price cut for its high-end electric vehicles in North America, according to the company's website. The move comes after Tesla CEO Elon Musk stated that previous price cuts had led to increased demand for more affordable models during an Investor Day event last week.
The starting prices of Model S and X in the US have been lowered by 5.3% and 9.1%, respectively, to $89,990 and $99,990. The Plaid versions of these models have also been reduced by 4.3% and 8.3%, respectively, with the new cost of $109,990 representing a decrease of $26,000 and $29,000 compared to their January prices.
Musk has claimed that the demand for Teslas is almost limitless and will continue to increase as the company makes its vehicles more affordable. However, the recent price cuts for Model S and X suggest that these particular models may not have experienced the same surge in demand as other vehicles when Tesla reduced prices earlier this year.
Last month, Fred Lambert of Electrek reported that price reductions on Model Y vehicles resulted in "unprecedented demand" in the US with the EV crossover selling out entirely until April.
Tesla slashed prices on its more affordable cars by up to 20% in January, which allowed buyers to qualify for tax incentives by placing their purchases under a cap of $55,000.
During the recent investor day event, Musk addressed the impact of price changes on demand: "We found that even small changes in the price have a big effect on demand, very big."
Bank of America analyst John Murphy suggests that legacy automakers' thin profit margins or losses related to their lack of scale in EV markets could prompt them to lower their own EV prices following Tesla's recent reductions. This could potentially lead to a price war.
Tesla plans to introduce a new version of Model 3 called "Highland" later this year while also making styling changes to Model Y referred to as "Juniper" set for next year's launch, Reuters reports.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,