Tesla’s Model Model S priced below $70,000 after price cut

In a development that could potentially boost Tesla’s marketshare, the carmaker’s CEO Elon Musk tweeted that its Model S “Long Range” sedan in the United States will receive yet another price cut bringing its price to below $70,000 for the first time to $69,420.

This is the second time this week that Tesla has cut the price for its high-end sedan.

Tesla has also cut the price of the Model S in China by 3%.

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

Introduced in 2012, Tesla’s Model S is facing competition from Tesla’s less pricey, mass-market Model 3 sedan, which it launched in 2017, with a price tag of $37,990. According to an analyst’s note from Credit Suisse, the Model S makes up only around 5% of Tesla’s total volume.

According to analysts, the price reduction of the Model S is most likely in response to price cuts by electric vehicle startup Lucid Motors, which sells its luxury-sedan Air model at a starting price of $69,900. Lucid Motors’ prices includes a $7,500 U.S. government electric vehicle tax credit, which Tesla vehicles are no longer entitled to.

The price cuts also comes at a time when the electric vehicle market, which has since long been dominated by Tesla is heating up with several carmakers scheduled to launch new electric vehicles in 2021.

Case in point: Daimler AG is scheduled to release an electric version of its Mercedes-Benz S-class luxury sedan, the EQS, in 2021. The EQS is expected to be significantly more expensive than Tesla’s Model S.

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