Tesla, it’s fair to say, has had a memorable quarantine.
The electric car company was the focal point of a dispute earlier this month, when CEO Elon Musk engaged in a standoff with county officials in California, when he vowed to reopen the company’s factory in Fremont in violation of state lockdown orders. After the officials backed down, Musk teased plans to build a new Gigafactory in Texas.
The company posted a $16 million profit in the first quarter, despite the suspension of production in much of the world. And this is to say nothing for Musk’s latest rocket launch plans, his announcement of a Tom Cruise movie to be shot in space, and the recent birth of his nontraditionally named child.
Now, Tesla has announced that it’s cutting prices on its cars, in North America and China.
According to CNBC, “the company’s Model S sedans will now be priced from $74,990, and its Model X sport utility vehicles from $79,990, according to its website. The cheapest Model 3 sedan will be priced at $37,990.” The cars were previously priced at $79,990, $84,990 and $39,990, respectively.
Prices will be cut in China as well.
The move comes as car dealerships were closed in the U.S. for months, which has created pent-up demand.
The company also announced, according to Reuters, that the Supercharger quick-charging service will no longer be free for new customers of its Model S and Model X cars.
Per Barron’s, the decision could be taken in multiple ways. It’s generally bad news, the analysis says, for car companies to lower prices, while views of tech companies doing the same are often viewed differently.
Tesla is both a tech company and a car company, but unlike most others of the latter, it sells its cars directly, rather than through independent dealerships.
Following the decision, analyst Daniel Ives of Wedbush raised his price target for Tesla to $800, from $600.
“While Tesla (and every other auto manufacturer) is navigating this unprecedented COVID-19 environment, the company took a major step forward around fulfilling demand and production concerns with the Fremont artery now up and running after the Musk vs. Alameda County stand-off got resolved,” Ives’ note said.
“While Elon is now laser focused on today’s monumental and historic SpaceX’s Crew Dragon launch to the International Space Station, back on Earth Tesla appears to be turning the corner from both a demand and production perspective heading into the month of June.”
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.