Tesla Inc. (NASDAQ: TSLA) has raised the price of its top-of-the-line Model S by $5,000 in the United States. It is a bold move in an electric vehicle (EV) market that has been choppy this year. It also indicates that the company wants to improve its already solid margins. Tesla has had 49% of the U.S. EV market this year.
24/7 Wall St. Key Points:
- Tesla Inc. (NASDAQ: TSLA) has raised the price of its top-of-the-line Model S by $5,000.
- It is a bold move in an electric vehicle market that has been choppy this year.
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According to Reuters, which examined prices at Tesla’s website, “The Model S base variant All-Wheel Drive (AWD) will now cost $79,990, while the performance ‘Plaid’ variant will cost $94,990, according to the website.” The jump comes during a period when investors hope that Tesla will introduce a $25,000 EV to draw buyers to a model priced well below the overall market. Cox Automotive reports that the average EV price in September was $56,328, while the average price of a new gasoline-powered car was $74,490.
The Tesla Model S sedan’s sales are well behind the Model Y SUV and slightly behind the Model 3 sedan. It is among the expensive EV sedans, including the EV models from Mercedes, BMW, and Lucid.
Tesla’s EV sales have slowed this year and are expected to be down or flat compared to 2023. In the third quarter of 2024, it delivered 462,890 units.
Tesla’s margin could use a lift. The company’s automotive revenue in the third quarter was $20 billion, up 2% from the same quarter a year ago. Operating income rose 54% to $2.7 billion. However, like other EV companies, it has cut prices on many models to hold revenue when the American public favored gas-powered cars.
Like other EV companies, Tesla has had to contend with consumer concerns about high prices, range, number of chargers, and charging time. With the Model S, it clearly thinks it can overcome those concerns.
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