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Tesla Again Cutting Price of Model S, Musk Says

By Eric Volkman – Oct 15, 2020 at 8:36PM

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How low can the CEO go?

For the second time in a matter of only days, Tesla (TSLA 0.03%) is reducing the price of its Model S sedan. That's according to the company's colorful CEO Elon Musk, who announced this in a Wednesday afternoon tweet, reading in its entirety:

The gauntlet has been thrown down! The prophecy will be fulfilled. Model S price changes to $69,420 tonight.

The contest Musk appears to be referring to is with Lucid Motors, a privately held rival whose CEO and CTO is one-time Tesla executive Peter Rawlinson. Earlier on Wednesday, Lucid announced that the starting price of its upcoming Lucid Air sedan would be $69,900, once a federal tax rebate kicks in.

A Tesla Model S on the road.

Image source: Tesla

In what's likely not a coincidence, Rawlinson's position at Tesla was vice president and chief engineer for Model S, according to his LinkedIn page.

Musk's pronouncement marks the second time this week the sticker price of the Model S has been lowered. It was first cut from $74,990 to $71,990.

Lucid Air has not yet reacted to or made a formal statement about Musk's pronouncement.

The Model S is one of the better-established electric vehicles (EVs) on the market. It first rolled out of Tesla factories in 2012. Yet its positioning as a premium car limits its potential customer base -- in Q3, for example, the company delivered 15,200 Model S and its similarly premium Model X SUV. By comparison, the more budget-priced Model 3 sedan and the Model Y SUV combined for 124,100 deliveries.

Few investors are happy with price cuts. On Thursday, they seemed to indicate their displeasure with Tesla's latest one[s], bidding the stock down by 2.7% on the day.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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