UK Markets open in 6 hrs 6 mins
  • NIKKEI 225

    23,505.28
    +31.01 (+0.13%)
     
  • HANG SENG

    24,786.13
    +31.71 (+0.13%)
     
  • CRUDE OIL

    40.60
    -0.04 (-0.10%)
     
  • GOLD FUTURES

    1,904.40
    -0.20 (-0.01%)
     
  • DOW

    28,363.66
    +152.84 (+0.54%)
     
  • BTC-GBP

    9,867.31
    +1,412.64 (+16.71%)
     
  • CMC Crypto 200

    259.78
    +3.68 (+1.44%)
     
  • Nasdaq

    11,506.01
    +21.31 (+0.19%)
     
  • ^FTAS

    3,268.54
    +7.53 (+0.23%)
     

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000

Tina Bellon and C Nivedita
·2-min read
FILE PHOTO: Tesla Model S drives during electric car E-Rallye Baltica 2019 in Latvia
FILE PHOTO: Tesla Model S drives during electric car E-Rallye Baltica 2019 in Latvia

By Tina Bellon and C Nivedita

(Reuters) - U.S. electric vehicle maker Tesla Inc <TSLA.O> cut the price of its Model S "Long Range" sedan in the United States to $69,420 (53,334 pounds), its website showed, following a tweet https://bit.ly/2H0JCP0 flagging the cut earlier on Wednesday from Chief Executive Elon Musk.

The cut is Tesla's second this week for the high-end sedan, following a 4% cut to $71,990 on Tuesday.

Tesla shares closed 3.3% higher at $461.30 on Wednesday and were little changed in after-hours trade.

The company also on Tuesday reduced by 3% the price of its Model S in China, where it had previously cut the starting price of its Model 3 sedan.

The starting price for Model S is now a thousand times that of a pair of red satin shorts that Tesla started selling in July for "$69.420" to poke fun at the company's naysayers.

Tesla introduced its Model S in 2012, but in recent years the car has faced competition from the automaker's less expensive, mass-market Model 3 sedan, launched in 2017, which currently starts at $37,990. The Model S makes up only around 5% of Tesla's unit volume, said a Credit Suisse analyst in a client note on Wednesday.

The analyst said the Model S price reduction was likely in response to price cuts by electric vehicle startup Lucid Motors, which sells its luxury sedan Air model at a starting price of $69,900. That includes a $7,500 U.S. government electric vehicle tax credit, for which Tesla vehicles are no longer eligible.

The price cuts also come as competition in the electric vehicle market - long dominated by Tesla - heats up, with several automakers launching new electric vehicles next year.

Germany's Daimler AG <DAIGn.DE> is scheduled to release an electric version of its Mercedes-Benz S-class luxury sedan, the EQS, next year. Analysts expect the EQS to be significantly more expensive than the Model S, however, with the latest version of the gasoline-powered S-class retailing at more than 100,000 euros (90,292 pounds).

(Reporting by C Nivedita in Bengaluru, Tina Bellon in New York and Yilei Sun in Beijing; Editing by Matthew Lewis and Christopher Cushing)