When electric-car maker Tesla Motors (NASDAQ:TSLA) first launched its Model X SUV, the media was surprised by its high price tag. Initially, Tesla was only delivering the Signature Series version of the vehicle, which had a starting price of $132,000. But, just as Tesla promised, prices came down rapidly. And with the launch of a new Model X option today, Tesla is selling the Model X for even less.
Pricing history for the Model X
Before Tesla started selling the Model X last September, it had previously promised the SUV would be priced only slightly more than a Model S equipped with the same battery and motor configuration. This is one reason why the media was surprised by Tesla's initial Model X pricing; Tesla's entry-level dual-motor Model S, when the Model X was launched, started at about $75,000 -- a huge difference from the Signature Series' starting price of $132,000.
To be fair, alongside its Signature Series Model X, which was a fully loaded P90D model ("P," "90," and "D" standing for performance, a 90 kilowatt-hour battery, and dual-motor all-wheel drive, respectively), Tesla did also announce a cheaper, 90D variant -- a move the media almost entirely ignored. The confusion was due to Tesla's decision to prioritize deliveries of its limited Signature Series Model X units, which were already reserved when Model X deliveries started; while Tesla did announce a 90D variant, it wouldn't start delivering it right away. Without the $20,000 upgrade for performance, and after removing all other optional upgrades, the 90D variant sold for about $93,000 -- a significant haircut to the $132,000 price tag the media was citing. Still, $93,000 was pretty far off from its $75,000 Model S base dual-motor pricing at the time.
But pricing came down quickly. Less than a month after the first Model X was delivered, Tesla took the wraps off of the base version of Model X, a 70D variant. Starting at $80,000, it was only $5,000 more than the dual-motor base Model S -- a whopping $52,000 less than the Signature version of the SUV.
And Tesla didn't stop at an $80,000 Model X.
The Model X 60D
Now Tesla is introducing its most aggressively priced Model X yet: a 60D with a starting price of $74,000. The vehicle sports 200 miles of range on a single charge. This compares to 237 and 257 miles of range for the more expensive 75D and 90D Model X configurations, respectively. While it has less range than the Model X 70D, its 0-to-60 time and top speed of 6 seconds and 130 mph, respectively, are notably the same.
The launch of the Model X 60D follows Tesla's decision in June to release a cheaper version of its Model S, starting at $66,000. The new base Model S is delivered with a 75 kWh battery but only gives customers access to 60 kWh capacity. Access to the full battery pack's capacity is available anytime after delivery for a $9,000 fee.
Tesla's decision to launch a lower-cost Model X is in line with the company's recent moves to drive more demand for its vehicles as it continues to rapidly expand production. In addition to bringing to market lower-cost versions of its vehicles, Tesla has also started ramping up its marketing efforts -- expanding availability of Model X test drives and launching a 3-month tour across Tesla's markets in which potential customers can spend time with the Model X. Tesla is planning to deliver 50,000 vehicles in the second half of 2016 -- up from about 29,300 vehicles in the first half of the year.
Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.