Tesla’s cars are on sale.
In an effort to spur demand and attract customers, Tesla is cutting prices of its electric vehicles by as much as 6% in North America. Vehicle sales have declined sharply following months of state and federal lockdowns. As things start to reopen slowly, consumers are still hesitant to spend big.
Tesla’s website shows the starting price of a Model S is now $74,990. That’s down from $79,990, a $5,000 discount. The company’s Model X SUV is now priced at $79,990, down from $84,990. Even the lowest-priced Model 3 is $2,000 cheaper, now starting at $37,990.
Tesla also said it will cut prices in China by 4%, but only for the Model X and Model S vehicles. Tesla China, which is delivering Model 3 sedans from its Shanghai factory, has cut prices for the Model S and Model X that they import. However, they keep prices of locally made Model 3 unchanged.
Tesla is not the only automaker offering incentives to consumers. General Motors, Ford, and Fiat Chrysler are all offering 0% financing rates and deferred payment options on all new vehicle sales. Plus the used car market has seen a dramatic drop in prices, thanks in part to the ongoing Hertz bankruptcy.
Retail auto sales in the U.S. were cut in half in April, compared to a year earlier. However, sales in May are likely to improve slightly due to pent-up demand and incentives offered by carmakers. This information comes from a recent J.D. Power report.
Tesla was forced to stop work at its Fremont, California factory due to stay-at-home orders. It resumed production earlier in May after resolving a dispute over safety measures with local authorities.