Tesla cuts Model S and Model X prices in the U.S. to stoke demand
A drivers uses a Tesla Supercharging station in Corte Madera, California, US, on Thursday, March 2, 2023.
David Paul Morris | Bloomberg | Getty Images
Tesla cut prices on its two most expensive models in the U.S., the Model S and Model X, in a renewed bid to stoke demand for its cars with aggressive discounts.
The Tesla Model S now starts at $89,990, according to Tesla’s website, down around 5% from where they were priced previously. The Model X, meanwhile, starts at $99,990, which marks a 9% reduction.
For the high-end “Plaid” versions of the Model S and Model X, car buyers can now expect to pay $109,990. That’s down 4% for the Model S Plaid, and 8% for the Model X Plaid.
Tesla shares were up around 0.6% in U.S. premarket trading Monday.
It follows a series of aggressive discounts from the company in recent months. In January, Tesla reduced prices of its new cars by as much as 20%, making the vehicles more affordable and likely eligible for federal tax credits in the U.S.
The latest price reduction is likely unrelated to EV tax credits introduced in President Joe Biden’s Inflation Reduction Act, as they remain above the $55,000 threshold to qualify for up to $7,500 toward purchasing new vehicles.
The pace and frequency of Tesla’s price adjustments goes beyond what established automakers have attempted in the industry, where the base price of a vehicle in inventory is still referred to as a “sticker price.”
EV price war
This has ignited a price war among carmakers competing to lower their prices in a bid to lure in more customers and drive sales. After Tesla’s January price reductions, Ford slashed prices on its electric Mustang Mach-E crossover by up to 8%.
Musk has shifted Tesla’s focus of late to bringing prices down to spur demand for its products.
On the firm’s fourth-quarter earnings call in January, he said Tesla was seeing orders almost doubling the rate of production. “These price changes really make a difference for the average consumer,” Musk said at the time.
EV arms race
“The price cuts Tesla has already implemented globally has catalyzed demand by 30% out of the gates as this latest price cut is another smart move,” Dan Ives, managing director of equities at Wedbush Securities, told CNBC via email.
“This is an EV arms race playing out and Tesla has the margins to make price cuts and still be well above other automakers. In this economic cloudiness Tesla needs to rip the band-aid off and cut prices and the Street will like this.”
To make discounts of those proportions, Tesla will need to match them with production cost reductions. It’s a goal the company has been pushing hard to achieve, with efforts to cut down on certain spending in its supply chain already underway.
Last week, a Tesla executive said the company was developing an EV motor that can be built without rare earth metals — which are critical to the motors used in electric vehicles — citing the need to lower costs and environmental risks that accompany the mining of these minerals.
Technology
Amazon was questioned by House China committee over ‘dangerous and unwise’ TikTok partnership
Amazon logo on a brick building exterior, San Francisco, California, August 20, 2024.
Smith Collection | Gado | Archive Photos | Getty Images
Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok, CNBC confirmed.
A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.
“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.
Representatives from Amazon and TikTok did not immediately respond to CNBC’s request for comment.
TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.
President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok, and said in a March interview with CNBC’s “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.
In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.
— CNBC’s Jonathan Vanian contributed to this report.
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Former U.S. Army intelligence analyst Chelsea Manning says censorship is still “a dominant threat,” advocating for a more decentralized internet to help better protect individuals online.
Her comments come amid ongoing tension linked to online safety rules, with some tech executives recently seeking to push back over content moderation concerns.
Speaking to CNBC’s Karen Tso at the Web Summit tech conference in Lisbon, Portugal, on Wednesday, Manning said that one way to ensure online privacy could be “decentralized identification,” which gives individuals the ability to control their own data.
“Censorship is a dominant threat. I think that it is a question of who’s doing the censoring, and what the purpose is — and also censorship in the 21st century is more about whether or not you’re boosted through like an algorithm, and how the fine-tuning of that seems to work,” Manning said.
“I think that social media and the monopolies of social media have sort of gotten us used to the fact that certain things that drive engagement will be attractive,” she added.
“One of the ways that we can sort of countervail that is to go back to the more decentralized and distribute the internet of the early ’90s, but make that available to more people.”
Nym Technologies Chief Security Officer Chelsea Manning at a press conference held with Nym Technologies CEO Harry Halpin in the Media Village to present NymVPN during the second day of Web Summit on November 13, 2024 in Lisbon, Portugal.
Horacio Villalobos | Getty Images News | Getty Images
Asked how tech companies could make money in such a scenario, Manning said there would have to be “a better social contract” put in place to determine how information is shared and accessed.
“One of the things about distributed or decentralized identification is that through encryption you’re able to sort of check the box yourself, instead of having to depend on the company to provide you with a check box or an accept here, you’re making that decision from a technical perspective,” Manning said.
‘No longer secrecy versus transparency’
Manning, who works as a security consultant at Nym Technologies, a company that specializes in online privacy and security, was convicted of espionage and other charges at a court-martial in 2013 for leaking a trove of secret military files to online media publisher WikiLeaks.
She was sentenced to 35 years in prison, but was later released in 2017, when former U.S. President Barack Obama commuted her sentence.
Asked to what extent the environment has changed for whistleblowers today, Manning said, “We’re at an interesting time because information is everywhere. We have more information than ever.”
She added, “Countries and governments no longer seem to invest the same amount of time and effort in hiding information and keeping secrets. What countries seem to be doing now is they seem to be spending more time and energy spreading misinformation and disinformation.”
Manning said the challenge for whistleblowers now is to sort through the information to understand what is verifiable and authentic.
“It’s no longer secrecy versus transparency,” she added.
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