Tesla brought cheaper versions of its Model S sedan and SUV Model to the United States
Tesla shares fell 2.6% on Tuesday, while peers also lost ground as investors worried about a price war. Rivian fell 3.5% while Lucid lost 5.6%.
The company has already slashed the prices of its vehicles in the U.S., China and other markets as sales growth outpaces profit margins, which are still higher at automakers.
The Austin, Texas-based company has also offered other stimulus to reduce inventories as part of a strategy that CEO Elon Musk says is part of Tesla’s recession plan.
The new “Standard Range” S and X models are $78,490 and $88,490, respectively.
The Model S has a range of up to 320 miles, which is less than the regular two-engine and three-engine Plaid variants, which offer up to 405 miles and 396 miles, respectively.
The Model X SUV has a range of up to 269 miles, well below its more expensive versions, which offer up to 348 miles.
Both models will have the same batteries and motors as the $10,000 more expensive dual-motor variants, but their performance and range will be limited by software, a Tesla sales representative said.
Another sales rep said Tesla has no plans to offer a firmware update to unlock range and performance in the future.
“The idea is to appeal to consumers who are interested in the logo and the EV experience but may be put off by the higher price compared to the competition,” said Susannah Streeter, director of finance and markets at Hargreaves Lansdown.
Tesla said the new variants will be available for delivery between September and October. The world’s most valuable automaker sold 19% more of its older and higher-end Model X and S in the second quarter.
However, last month the company said lower average selling prices and lower sales of its more expensive models weighed on operating income and sales.