The Model 3, Model S, and Model X, in North America, have had their prices reduced. The Model S and X have been cut $5,000 each. The Model S has gone from 79,990 to 74,990 and the Model X has gone from 84,990 to 79,990 for their entry-level Long Range Plus versions. Their more expensive versions have also received a $5,000 cut in price. The Model 3, however, only received a $2,000 price cut on all its versions. The online entry-level Standard Range Plus Model 3 is now at $377,990.
The company will also reduce the prices of the Model S and X in China, but the Chinese price of the Model 3 car is not going to be cut. The reason being that it is produced in the country. The car company did not give any explanation and reasons for the price reductions, but many believe that Tesla is trying to get sales going after the decline in demand brought about huge losses for car manufacturers. It isn’t a secret that the car market economy has been spiraling downward throughout the pandemic. Things went especially badly for Elon Musk’s company.
Tesla had been reporting profits for two quarters in a row, making money even as they spent money to grow. They opened a factory in China and had planned another for Germany. Elon Musk had been able to take on a multitude of challenges, but the coronavirus brought a whole other challenge. He described society’s reactions to the virus as foolish, an overreaction. The stay-at-home orders were just in his way after he had gained so much momentum to change the auto industry completely.
In recent times, he has attacked officials for not allowing his factory to continue operations and gone against orders— opening factories anyway. These decisions have brought about questioning of the co-founder of PayPal’s judgement, and his anger only continues. As his company was ready to release the Model Y, the Tesla factory was ordered to close. Things had been looking up, the company announced a quarterly profit. They had gotten production under control and were able to actually make money. The Model Y had started going out on deliveries, but Tesla’s dominating of the car industry was put on hold when his highest profiting plant was shut down in late March.
The coronavirus continued to frustrate Musk, as he continued to state that the country was completely overreacting and he used unproven research that showed the reported deaths were overstated. He predicted that there would be zero new cases in the U.S. by May. However, there were 32,000 more cases on April 30. Despite his resistance, it seems that Musk truly has to slow down his operations and lower prices.
Though, he continues to fight. He fought for that factory to reopen, but the county asked him to stop cease operations immediately. The employee parking lot, however, was found full. We can see that Tesla is resisting the stay-at-home order, but also going about business in a safe way. However, the price reduction shows that the pandemic has had an impact on Tesla’s momentum. How they deal with it as they go on, and if they can get back onto the train that was leading them to the peak of the auto industry will remain to be seen.