Tesla Inc. (TSLA)’s Model S “Long Range” sedan will now carry a price tag of $69,420 in the United States, the company announced on its website following a tweet by CEO Elon Musk about the price cut on Wednesday.
TSLA shares rose over 3 percent in the previous trading session following the news. However, the stock is down about 3 percent in the mid-day trading Thursday.
This is the second time in a week the company has slashed the prices for its high-end sedan. Previously, it reduced the rate by 4 percent to $71,990 on Tuesday. Tesla has also reduced the price of its Model S by 3 percent in China.
The California-based electric vehicle maker launched its Model S in 2012, but the company has been struggling to boost its sales after the roll out of its more affordable Model 3 sedan, which the company has been manufacturing in bulk following its launch 3 years ago. Model 3 sedan price begins from $37,990.
An analyst at research firm Credit Suisse recently stated in a research note to clients that Model S accounts for just 5 percent of TSLA’s unit volume. The research firm believes the latest Model S price cut possibly follows price reductions made by rival electric car maker Lucid Motors, which recently announced that its sedan Air model will have a starting price of $69,900.
The competition in the electric car industry is about to intensify as several automakers are expected to roll out their new electric cars in 2021. For instance, Germany’s Daimler AG will launch electric model of its Mercedes Benz S-class next year.
Tesla was among very few companies that continued to grow even during the pandemic. TSLA stock price has skyrocketed about 450 percent year-to-date, and about 770 percent over the past year. The recent performance of the stock is one of the indicators for predicting stock’s future momentum, so we can say that TSLA stock is expected to do well in the coming months.