Tesla has made a surprise move by increasing the prices of its Model S and Model X, just weeks after slashing prices on the flagship models. The electric vehicle maker has raised the starting price of the Model S by $2,500 and the Model X by $1,000, but is also offering three years of free Supercharging to new buyers.
This latest pricing update follows several rounds of price cuts across Tesla’s entire vehicle lineup since the start of the year. The Model S and Model X saw the most significant reductions and are now priced at $85,000 and $95,000, respectively.
Tesla’s decision to increase the price of the Model S and Model X suggests that demand for these vehicles may be stronger than previously thought, despite reports of inventory build-up at the end of the quarter. While Tesla has claimed that this was due to a large number of vehicles being in transit to Europe and Asia, a lack of orders may also have played a role.
Notably, the Model S and Model X are the only Tesla vehicles that don’t qualify for the new federal tax credit, which may have contributed to softening demand for these flagship models. In response, Tesla is sweetening the deal by offering three years of free Supercharging to new buyers, which could prove to be a bigger demand creator than a $2,500 price cut.
Tesla’s pricing strategy remains a moving target as the automaker seeks to balance demand and profitability. While price cuts can help stimulate demand, they can also erode margins, which is why Tesla may be trying to strike a delicate balance by offering incentives while also raising prices.
It will be interesting to see how buyers respond to this latest pricing update, and whether Tesla’s Model S and Model X can regain their status as top performers in the EV market.
