Elon Musk, the unofficial corporate king of Twitter, announced Wednesday that the price of the Model S will be reduced to $69,420.
Tesla Daily’s Rob Maurer said that if Musk follows through with his tweet, the additional $2,750 cut will mark a 3.5% discount on the Model S.
The move followed an announcement from Lucid Motors, a startup led by former Tesla executives, that its Tesla competitor, the Lucid Air, will be available for $69,900 following the tax incentives Tesla no longer qualifies for.
Tuesday, Tesla said it would be reducing prices on its entry-level Model S by $3,000 to $71,990. It lowered the price of the Tesla Model S Performance Model to $91,990 from $94,990.
“Over the last few quarters, Tesla has likely been selling around 7,500 Model S vehicles per quarter. The aggregate two-day price reduction of $5,570 could therefore present a gross profit headwind of about $42M. However, some customers may elect to spend more on options due to the lower base price, and Tesla is likely to sell some additional Model S vehicles due to the price reduction,” Maurer wrote.
So is the move more than a vengeful publicity stunt?
Jim Cramer said Elon Musk is trying to be Henry Ford and this is one more step closer to mass production.