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Tesla launched ‘economy’ variants of its Model S sedan and Model X SUV in the US on Monday that cost $10,000 less, but the reduced price comes at a cost.
The new ‘Standard Range’ S and X models are now priced at $78,490 and $88,490, but will come with less range and power.
The Model S has 410 miles, but the cheapest version has 320, and the Model X loses 79 miles, giving it 269 miles on a single charge.
While both models will have the same batteries and motors as their higher-priced counterparts, the software had to limit specific features and updates.
The Elon Musk-founded company hopes the move will boost sales as high borrowing costs hamper demand for expensive electric vehicles.
Electric vehicles have 20 percent less range: the Model S drops from 410 miles to 320, and the Model X loses 79 miles, leaving it with 269 miles on a single charge.
Susannah Streeter, Hargreaves Lansdown’s director of money and markets, said in a statement: “The idea is to appeal to consumers who are interested in the EV badge and experience, but might be put off by the higher price on comparison with competitors.
Along with the reduced range, the vehicles will also have less power.
Acceleration from 0 to 60 mph is listed at 3.7 seconds and 4.4 seconds for the new Model S and Model X compared to 3.1 seconds and 3.8 seconds for the other models.
Industry insiders have also said that standard range vehicles will not receive firmware updates to access more range or performance in the future.
The new price could also be in response to the entry of more EV manufacturers into the US market, such as Lucid, which dropped its Air Pure to $83,900.
The 22023 Porsche Taycan starts at $86,700 and the Mercedes-Benz EQE Sedan starts at $74,900.
New ‘Standard Range’ S and X models are now priced at $78,490 and $88,490
The new price could also be in response to the entry of more EV manufacturers into the US market. Porsche Taycan 22023 (pictured) starts at $86,700
However, Tesla announced record car deliveries in the second quarter of the year in July after US business was bolstered by federal tax credits for electric vehicles.
The company delivered 446,140 cars worldwide in the three months to June, beating its own prediction of 445,000.
It marked an 83 percent increase in sales from last year when coronavirus restrictions hampered production in China.
Sales in the US have benefited from a federal tax cut imposed on electric cars by the government in April.
The plan, designed to accelerate the shift away from gasoline-powered cars in the United States, means motorists can claim up to $7,500 in tax credits when they buy green vehicles.
Only ten models, including plug-in hybrid cars, are eligible for the lump sum. But another seven entitle buyers to $3,750.
Among those set to benefit from the full discount are the Tesla Model 3 and Tesla Model Y, which retail for around $41,990 and $56,990.
But the generous cut means that a Tesla Model 3 is now cheaper than a Toyota Camry in California.
The all-electric vehicle starts at $40,240, but the refund, combined with another $7,500 California tax refund, depending on income and other requirements, brings it down to $25,240.
Meanwhile, the Japanese-built Camry is trading at $26,320 or more.
According to the latest figures, the Model 3 and Y accounted for almost all sales (446,915) in the second quarter of the year.
Catch: Tesla Introduces ‘Affordable’ Models in the US with a $10,000 Price Reduction