Summary
- Tesla increased the price of its Model X by $5,000 for both trims
- The increase puts the trims over the $80,000 limit for the Federal EV Tax Credit
- The Model X trims now cost $84,990 and $99,990 for the All-Wheel-Drive and Plaid builds
- The price increase may be due to tariff pressure, a desire for more margin, and to push consumers towards the Cybertruck
- The Model X is now out of the qualifying price for the EV tax credit, potentially driving consumers towards the Cybertruck over the Model X.
Article
Tesla has increased the price of both Model X trims by $5,000, marking the first price bump for the flagship vehicle since the middle of the previous year. This increase puts the trims above the $80,000 limit for the Federal EV Tax Credit of $7,500, with prices now set at $84,990 and $99,990 for the All-Wheel-Drive and Plaid builds, respectively. The price hike is seen as a way for Tesla to potentially gain more margin on the low-volume Model X while also steering consumers towards the Cybertruck, a vehicle with a promising future for the company.
In the fourth quarter of the previous year, Model S, Model X, and Cybertruck accounted for 23,640 out of the 495,570 deliveries made by Tesla, with the Cybertruck likely comprising a majority of this figure. The Model X, known as a low-volume vehicle primarily for fans of the car, may not see a significant shift in interest due to the $5,000 price increase. CEO Elon Musk has previously referred to the Model X and Model S as “niche products” produced for sentimental reasons rather than significant future impact, potentially indicating a strategy to steer consumers towards more relevant models like the Cybertruck.
The increase in price for the Model X also means that the vehicle is now priced out of the qualifying range for the $7,500 EV tax credit, which could influence consumers to consider the Cybertruck instead for its relevance and tax credit qualification. The previous price change for the Model X occurred in July 2024, with a $2,000 bump in price at that time. Tesla’s decision to raise the price of the Model X may be influenced by various factors such as tariff pressure, a desire for higher margins on the vehicle, and a strategic move to promote vehicles with more significance for the company’s future.
Overall, Tesla’s decision to increase the price of the Model X by $5,000 suggests a shift in focus towards models like the Cybertruck, which have shown promise in terms of volume and future impact. The move also signifies a prioritization of vehicles that have a more significant role in the company’s long-term strategy, with the Model X being positioned as a niche product with sentimental value. The impact of the price increase on consumer demand for the Model X remains to be seen, but the vehicle’s new starting price of $84,990 may prompt potential buyers to explore other Tesla models such as the Cybertruck.
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