Needless to say, the past couple of weeks have been huge for Tesla Inc. (NASDAQ:$TSLA). And now, just one week after the automaker launched the Model 3 vehicle, Tesla lowered the base price of its Model X SUV to $79,500.
So what caused the shift in price? According to the Palo Alto, California-based company, improving margins were the sole reason behind the move, which came as the company prepares for Model 3 “production hell.”
Meanwhile, there are numerous analysts worried that the Model 3 launch – which is priced at $35,000 – would drive prospective buyers away from the Model X SUV to the lower-priced premium sedan. However, CEO Elon Musk announced earlier this week that demand for the luxury electric sport-utility vehicle remains.
In a statement released earlier today, Tesla said the following: “When we launched Model X 75D, it had a low gross margin. As we’ve achieved efficiencies, we are able to lower the price and pass along more value to our customers.”
For perspective, the previous starting price for the Model X SUV was $82,500. This means Tesla lowered the starting price of the vehicle by $3,000.
Earlier this week, on a call with analysts, Musk reaffirmed that the Model 3 vehicle had not hurt Model X SUV sales. He also said that demand for both the Model X and Model S had actually increased thanks to the release of the $35,000 vehicle.
Featured Image: twitter
