Tesla lowers Model X base price due to improved margins


Tesla lowers Model X base price due to improved margins

Tesla has lowered the entry-level price of the Model X SUV, from $82,500 to $79,500. The $3,000 price drop is the result of improved margins for the electric vehicle, which the company achieved thanks to “efficiencies” achieved in the manufacturing process, Reuters reports.

Tesla’s Model X and Model S sales performance were areas of key interest during the company’s earnings report this past week, since analysts had anticipated that the Model 3 and its attractive price point could potentially drive down demand for the more expensive existing vehicles in Tesla’s lineup. It turned out that in the wake of Tesla’s splash Model 3 debut at the end of July, demand grew for both Model S and Model X, according to the company.

On Tesla’s earnings call this week, Musk said that while it’s obviously hard to predict the future, they’re seeing boosted demand coming out of the Model 3 launch, and see no reason why it won’t continue. If Model 3 ends up generating a lasting halo effect for Tesla’s higher end vehicles, that’s basically the best possible result the automaker could ask for, especially as it will be some time before it can satisfy existing demand for Model 3 with adequate production volume.

The Model X 75D’s price reduction should help stoke that demand further. Next quarter’s results will be the real ones to watch, however, as we’ll have more time and distance from the Model 3’s big press moment to evaluate whether the halo effect is a lasting one.

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