In an effort to increase sales as the market for pricey electric cars is being hampered by high financing rates, Tesla (TSLA.O.) on Monday introduced less priced versions of its Model S sedan and Model X SUV with reduced driving ranges in the United States.
As it prioritizes sales growth above profit margins, which are still high among manufacturers, it has already lowered the cost of its cars in the US, China, and other regions.
Elon Musk, the CEO of Tesla, said that this technique is part of Tesla’s recession playbook. The Austin, Texas-based business has also provided additional incentives to cut inventories.
Prices for the new “standard range” S and X models are $78,490 and $88,490, respectively.
Less than the ordinary twin-motor and tri-motor Blade models, which provide 405 and 396 miles, respectively, the Model S has a range of up to 320 miles (515 km).
The Model X SUV’s range is only up to 269 miles, far less than the 348 miles of its more costly counterparts.
According to a Tesla sales representative, all versions feature the same batteries and motors as the $10,000 dual-motor variations, but their performance and range will be limited by software.
According to Susannah Streeter, head of finance and markets at Hargreaves Lansdown, “the idea is to appeal to consumers who are interested in the badge and the EV experience but may be put off by a higher price compared to competitors.”
According to Tesla, the additional variations will be delivered between September and October. In the second quarter, the most valuable automaker in the world sold 19% of its older, more expensive X and S models.
However, it has previously said that its operational income and revenue were being negatively impacted by lower average selling prices and fewer sales of its most costly models.
After increasing by over 95% so far this year, Tesla shares dropped 1.5% in early trade.
