Tesla makes a deal and cuts car prices by up to $5,000

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If you have been sitting on the fence regarding whether or not to buy a new Tesla, the electric carmaker is trying to sway your thoughts by cutting the prices of three of its car models.

As of Wednesday, Tesla had taken down the price of its Model 3 by $2,000, to $37,990 for its Standard Range Plus car that delivers 250 miles on a fully charged battery. Tesla also slashed $5,000 off the sticker prices of its Model S sedan and Model X SUV. The Model S Long Range Plus now starts at $74,900 for a version with a range of 391 miles, while the top of the line Model S Performance sedan also had its price reduced by $5,000, to start at $94,990.

The Model X now starts at $79,990 for its Long Range Plus edition.

Tesla didn’t make any changes to the price of its new Model Y crossover vehicle, which starts at $46,690, and only began being delivered to customers in March.

Tesla didn’t respond to a request for comment about why it cut its prices. Less than two weeks ago, the company got the approval from Alameda County officials to resume vehicle production at its factory in Fremont after halting work for two months due to the Bay Area’s shelter-in-place rules meant to contain the spread of coronavirus.

Dan Ives, managing director with Wedbush Securities, said Tesla’s cutting of prices has to been seen as a way to stimulate buyer demand in the United States, where auto sales on the whole are expected to see a sharp drop due to an economy that has been rattled by coronavirus-related business shutdowns and millions of layoffs.

“This is a smart strategic move in our opinion, given the current macro and COVID environment consumers are facing,” Ives said. “We believe these price cuts across the auto landscape will help catalyze a snap back in demand heading into June and the fall.”

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At the time of its first-quarter report, Tesla said it had the capacity to exceed its goal of delivering at least 500,000 vehicles worldwide this year. However, Tesla also said, “It remains uncertain how quickly we and our suppliers will be able to ramp production after resuming operations.”

Source: https://www.mercurynews.com/2020/05/27/tesla-makes-a-deal-and-cuts-car-prices-by-up-to-5000/