Tesla hasn’t made any memorable moves to adjust pricing to meet or beat rival vehicles from mainstream brands.
But it seems that crosstown rival Lucid Motors is different.
Tesla Model S Plaid
Tesla CEO Elon Musk announced Wednesday that the “gauntlet has been thrown down”—appearing to refer to Lucid’s pricing of the base Air electric sedan, earlier in the morning—and noted: “Model S price changes to $69,420 tonight!”
The gauntlet has been thrown down!
The prophecy will be fulfilled.
Model S price changes to $69,420 tonight!
— Elon Musk (@elonmusk) October 14, 2020
Musk didn’t say whether the move was a response to Lucid’s pricing announcement today. But if not, it’s quite a coincidence—especially considering that Tesla just cut Model S prices by $3,000 earlier this week.
Relative to the currently listed price of $71,990, the cut represents another $2,570 discount for the Model S—a total of more than $5,500 off the Model S price this week versus last week.
Lucid does have one order-sheet advantage with the Air, so far: its anticipated 406-mile EPA range is 4 miles above what the Model S Long Range currently achieves for that price. However deliveries of that version of the Air remain a year or more away.
Tesla’s new price for the Model S represents a significantly lower up-front cost than the Lucid Air, for which Lucid’s $69,900 price depends on its eligibility for the full $7,500 EV tax credit amount—and buyers eligibility to claim that amount. It’s a fair point to underscore that not everyone will qualify for the EV tax credit; you need that much tax liability in order to claim it.
Neither price includes the mandatory destination charge, which for Tesla is $1,200. We didn’t include it in this piece for comparison purposes since Lucid hasn’t yet set that amount.
Tesla entered a sunset period, with reduced amounts for the federal EV tax credit after selling a total of 200,000 qualifying vehicles in the U.S. After December 31, 2019, Tesla buyers haven’t been eligible for the credit.
Because very little of Musk’s play with numbers is coincidental, we’ll also highlight that the reduced price of $69,420 for the Model S also happens to be Lucid’s advertised price of $69,900 minus its horsepower rating, 480.
Lucid Air base model
If Musk is rattled by how close the Air has gotten to Model S territory, although the Air is a new design and the Model S is largely an eight-year-old one, it’s likely not just the car. Lucid includes a full house of Tesla expats, including CEO Peter Rawlinson, who oversaw development work on the original Model S, and VP of manufacturing Peter Hochholdinger, who ramped up Model 3 production.
In the same thread, Musk confirmed that production of the seven-seat (three-row) version of the Tesla Model Y is starting next month, with first deliveries in early December. That puts it ahead of earlier estimates from the company—arriving about the same time as first deliveries of the Volkswagen ID.4 and Ford Mustang Mach-E, which so far, Tesla has shown no interest in explicitly price-matching.
But remember that potential California rivalry? Consider it on.