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.