Tesla CEO Musk Says Model S Price to Be Cut for Second Time This Week

Tesla CEO Elon Musk says prices for the company's flagship Model S sedan will be cut to $69,420.

Tesla  (TSLA) - Get Tesla Inc Report CEO Elon Musk said prices for the company's flagship Model S sedan would be cut for the second time in a week.

Tesla said Tuesday it would be reducing prices on its entry-level Model S available for delivery by $3,000 to $71,990. It also reduced its Tesla Model S Performance Model to $91,990 from $94,990.

A day later, Musk said in a tweet that a second price reduction was on the way.

"The gauntlet has been thrown down! The prophecy will be fulfilled. Model S price changes to $69,420 tonight!" Musk tweeted on Wednesday.

Following Tuesday's price reduction, the Model S currently starts at $71,990. If Musk follows through with what he said in his tweet, the base price will come down by another $2,570, or 3.5%, according to Tesla Daily's Rob Maurer.

Musk's tweet followed an announcement from Lucid Motors that its lowest-trim, all-electric Lucid Air would start at $69,900, after a federal tax credit of $7,500 for which Tesla no longer is eligible.

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The Lucid Air has a projected range of 406 mikes for the base model, while the Model S has a range of 402 miles per charge.

The Model S price cuts follow reductions across Tesla’s lineup earlier this year that affected Model 3, Model S, and the six-seat Model X.

Back in May, Tesla already had reduced the price of the Model S Long Range Plus by $5,000 for a starting point at $74,990. Earlier this month, the electric vehicle maker cut prices for the cheapest version of its Model 3 by 8% to $37,000 after subsidies.

The moves come as Tesla continues to surprise investors and analysts with its better-than-expected output and global sales trajectory, despite Covid-19 headwinds and increasing competition from the likes of Volkswagen, General Motors  (GM) - Get General Motors Company (GM) Report, Ford  (F) - Get Ford Motor Company Report and others. 

Tesla declined 3.19% in premarket trading to $446.60.

On Thursday, the stock price target on Tesla was raised to $450 from $360 by analysts at Baird.