Tesla Motors Inc (TSLA) is still working on its price mix, and that’s one of the risks in TSLA stock. On Thursday, it addressed the issue.
Tesla released two new lower-cost versions of its all-electric Model S sedan. The Model S 60 and 60D start at $66,000 and $71,000, respectively. Prices for top-of-the-line Model S sedans top $100,000.
Restarting sales of cheaper Model S sedans helps fill in the upper end of the TSLA price ladder and pull in customers reluctant to shell out more cash.
Reinvigorating interest in the car is just good thinking. Quarter-over-quarter sales of the Model S slowed over the first three months of the year.
The new rear-wheel drive Model S 60 has a top speed of 130 miles per hour and can go from zero to 60 miles per hour in 5.5 seconds. It has a range of 210 miles on a full charge, Tesla says. The all-wheel drive Model 60D has a range of 218 miles and goes from zero to 60 in 5.2 seconds.
TSLA Extends Its Price Points
Both models come with a 75 kwh battery, but with a capped range. Owners will be able to pay for a software upgrade that unlocks the battery’s extra power in the future.
As for the lower rungs of the price ladder, Tesla plans to start selling the Model 3 for a base of $35,000 in late 2017. It already looks like a hit. Tesla says it’s received nearly 400,000 reservations with a $1,000 deposit.
Price flexibly impacts margins, but it’s a huge consideration for would-be customers. The Los Angeles Police Department said Thursday that it selected electric vehicles made by BMW (BAMXY) over Tesla. Presumably, price was a factor. The electric BMW i3 goes for about $42,000.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
