Why is Tesla currently lowering the prices of its Model S and X?
This page is translated from the original post "Pourquoi Tesla remise actuellement ses Model S et X ?" in French.
- 26/07/2023 14:30
In response to declining sales, Tesla is offering discounts of around 7,000 euros on its Model S and X in Standard or Plaid versions.
In the luxury and high-priced car market over 100,000 euros, it is difficult to establish a strong presence, even when the brand is Tesla. Manufacturing quality, dealership customer service, and after-sales support are all aspects that need attention… but also the residual value over time.
All these areas where the American company still struggles to convince a clientele often loyal to Porsche, Ferrari, or other prestige brands. Exceptional performance, wildly impressive horsepower figures, or widespread popularity on social networks no longer suffice when trying to compete at these pricing levels.
Because with an French entry-level price of 106,490 euros for a Model S and 114,490 euros for a Model X, the customer base is naturally smaller than for the Model 3 or Y, which are heavily subsidized by the state and government. Another challenge for Tesla is its “obligation” to produce in advance, even if the units are not yet sold, unlike other high-end brands that prefer to keep customers waiting and thus support the used car market, rather than manufacturing non-customized cars that are then destined for the scrap yard.
To meet its production promises, Tesla is therefore somewhat trapped. Evidence of this is that in the first quarter of 2023, the American company produced nearly twice as many Model S and X as needed. Consequently, Tesla France (but other markets are doing the same) offers vehicles in transit (thus immediately available) with discounts of up to 7,000 euros on new models, or even 9,000 euros on very low-mileage demonstration units.
The ultimate explanation lies in the age of these two vehicles, the S and X, launched respectively in 2012 and 2015. Luxury customers favor new releases, and the continuous software updates from Tesla don’t change that. Is this why the famous Roadster, promised for years, is still not here, or why the Cybertruck experiments with eccentricity to stand out?
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