Home » Why Tesla Made A $10,000 Cheaper Version Of The Model S And X

Why Tesla Made A $10,000 Cheaper Version Of The Model S And X

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I’m not saying Tesla created a standard range version of its Model S and Model X and launched it yesterday to distract from CEO Elon Musk’s cringeworthy attempt to fight Mark Zuckerburg, mostly because Elon Musk seems impervious to embarrassment, but it’s nice timing. Whatever the reason, the announcement of a cheaper Model S and Model X is good news for consumers and probably bad news for competing automakers.

While we’re at it, Lexus has a fancy version of its LC500, President Joe Biden makes a rare comment on the United Auto Workers contract negotiations, and U.S. Steel may have a new buyer.

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The Tesla Model S and Model X Standard Range Are Cheaper… For Reasons

Screen Shot 2023 08 15 At 8.39.40 AmTesla did its favorite thing, which is to announce news quietly overnight so that all of us can scramble to pull stories together. Honestly, as a newsman, it’s kind of fun. Who needs embargoes when you can just update your website and wait for Tesla watchers to notice?

Yesterday. Tesla modified its website to show a new ‘Standard Range’ trim level for Model S and Model X. For the Model S you get a vehicle capable of going a pretty good 320 miles on a charge for a price of $78,490, or exactly $10,000 off the old base Model S, which gets 405 miles of range. For the Model X, the same price drop gets you a $10,000 discount as well, dropping the price to $88,490. That gets you a less-good range of 269 miles. It’s unclear if the vehicles get a 100 kWh battery that’s been downgraded, a smaller battery, or if Tesla is swapping in a cheaper, lower-range LFP battery.

Why did they do this? Reasons abound. The company could have been doing it to distract from Musk’s weird Zuckerburg fight threats, but I doubt it. Reuters says this is the company “looking to increase sales as high borrowing costs hamper demand for expensive electric vehicles,” adding:

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The Austin, Texas-based company has also offered other incentives to reduce inventory in a strategy that CEO Elon Musk said was part of Tesla’s recession playbook.

That’s probably true. Financing a $90,000 car with these higher rates is not fun, especially when you can get a Model Y for under $40k with over 300 miles of range. It’s not as nice as the Model S, but it’s also not as old.

Some of this feels also like a continuation of Tesla’s ongoing price war. This new sub-$80,000 Tesla Model S compares favorably to the $105,540 you’d spend for a Mercedes EQS 450+ that gets 350 miles of range or a base Taycan, which, for $90k delivers an EPA-estimated range under 220 miles. The Model X isn’t as good a deal, because $87,100 buys a BMW iX that goes over 300 miles and is a much newer (and arguably better) car.

It’ll be interesting to see if the LFP battery is actually being swapped in, because that would make for an attractive vehicle.

Biden Weighs In On UAW/Big Three Negotiations

 

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Generally speaking, Presidents of the United States of America (not to be confused with The Presidents of the United States of America) do not weigh in on ongoing labor negotiations directly. The band probably does. As The Detroit News points out:

Presidential administrations have used economic spokespersons to comment on the potential economic impacts of bargaining, said Marick Masters, a labor expert and business professor at Wayne State University. But it’s uncommon for a president to weigh in on negotiations directly, “preferring instead to let the process work its will.”

As we have pointed out, this isn’t a normal negotiation and the new head of the United Auto Workers isn’t your typical union boss. Here are just some of the factors at play:

  • EVs probably require fewer workers to create
  • Tooling up for EVs is going to be expensive
  • The Big Three are unionized, their competitors are not
  • The union gave a ton of concessions to automakers during the Great Recession and hasn’t gotten most of them back
  • The current contract still has a two-tier wage structure, which most unions are trying to do away with
  • The new union leadership has promised no sweetheart deals
  • Inflation
  • The generally reliably Democratic-supporting UAW has not officially endorsed Biden yet, on purpose because of all the stuff going on right now

In the face of all that, Biden says he wants to make his intentions clear, stating:

I support a fair transition to a clean energy future. That means ensuring that Big Three auto jobs are good jobs that can support a family; that auto companies should honor the right to organize; take every possible step to avoid painful plant closings; and ensure that when transitions are needed, the transitions are fair and look to retool, reboot, and rehire in the same factories and communities at comparable wages, while giving existing workers the first shot to fill those jobs. The UAW helped create the American middle class and as we move forward in this transition to new technologies, the UAW deserves a contract that sustains the middle class.

That’s definitely a statement, but there’s nothing here particularly outrageous from the perspective of the mainstream Democratic view of labor. I think that’s about as far as Biden can reasonably go without rocking the boat too much.

U.S. Steel Might Get A New Owner

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We’ve known for a while that U.S. Steel, one of the oldest and biggest producers of steel for the automotive industry, has been for sale. The expected buyers were expected to come forward and then, all of a sudden, a new challenger emerged.

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Bloomberg has a play-by-play of all of the drama, which started with a big offer from rival Cleveland-Cliffs Inc.:

The news sent U.S. Steel shares soaring on Monday morning, as Cliffs CEO Lourenco Goncalves insisted in television interviews he was confident his bid would succeed, citing the backing of the influential United Steelworkers union.

However the bigger bombshell was still to come. In a statement thin on details, Esmark announced a “voluntary public cash and exchange offer” for U.S. Steel, which it said would run until Nov. 30 and could be extended.

Here’s my favorite part of the story:

Commenting on the announcement, a U.S. Steel spokesperson said it was the first that the company had heard from Esmark. “We welcome them to join the multiple parties already in our previously announced strategic alternatives process.”

Bouchard said that his offer was motivated by a desire to ensure U.S. Steel remained American owned after the weekend’s announcements.

“They’ve made huge strides, but we have a lot of work to do and we can make U.S. Steel U.S. Steel again,” he said. “This needs to stay an American institution.”

What a fun bit of news if you are a U.S. Steel executive or shareholder. I’m assuming the swipe about “stay an American institution” is a reference to Cleveland-Cliffs, which is owned by various stakeholders in different parts of the world (the largest shareholder seems to be in Luxemborg), though it’s possible there are some Chinese or other firms in the mix as well.

Check Out This Fancy LC500

I’ve got a review of the new 2024 Lexus LC500 with the V8 coming out but, it’s not a secret: I think the thing is great. It’s also something I assume Lexus could never build a new generation of, so it’s good news they’re adding variants to the existing model.

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2023.03.27

The 2024 Lexus LC500 Inspiration Series is a V8 LC500 with some aerodynamic improvements, mostly notably the front bumper canards and a (coupe-only) carbon-fiber fixed rear wing. The $116,700 price for the coupe is high, but they’re only making 125 of these things, so act fast.

The Big Question

You’ve got $90,000 to spend on one electric vehicle. What are you buying?

Photos: Tesla, US Steel, Lexus

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Ioan Radulescu
Ioan Radulescu
10 months ago

I think they offer the software-locked same batteries for Teslas because, at the end, those cars will be returned and their batteries will be in good state for new cars or oder battery-based solutions from Tesla (since they never get charged to 100%). So the Tesla is playing this on the second life (of the car), just like other manufacturers work with the second hand market in mind sometimes.

Toecutter
Toecutter
10 months ago

You’ve got $90,000 to spend on one electric vehicle. What are you buying?

Nothing on the market appeals to me. So I’d build one.

-used Alfa Romeo 4C where someone blew the engine up; ~$20,000 perhaps?
-Tesla Model 3 drive system and charger; $13,000
-Tesla Model 3 NCR21700 battery modules; $10,000

A lot is left in the budget for all of the custom fabrication that would be needed. The complete car could weigh in somewhere around 2,700 lbs, and would get around 200 miles range per charge driven normally. It would be a mid-engined terror that could do 0-60 mph in under 4 seconds.

I could do much better than a 4C as a donor vehicle, but then I’d have to build it from the frame up and make a custom body. But the possibility exists to build a custom streamliner weighing around 1,500 lbs with all of these parts installed, with 1/4 the 4C’s CdA value. Imagine getting a 700 mile range at highway speeds, 0-60 mph in 2.5 seconds, and the ability to flog it around a race track for at least an hour at a time.

Methane generator
Methane generator
10 months ago
Reply to  Toecutter

lol you’re not getting far on $90k mate. If you have $90k in the bank to spend on a hobby, you haven’t got the 3 months time off and you’ll have to pay your two garage helpers’ salary and benefits. Plus rent / mortgage, regular bills and all that on top of the $90k yeah it doesn’t add up. Oh I forgot you’ll have to pay for the parts as well, good luck!

Just but a frigging PHEV minivan (it’s still an EV, duh) and a couple of Miatas.

Last edited 10 months ago by Methane generator
Toecutter
Toecutter
10 months ago

I have $18k total in my Triumph GT6 EV build, including restoration. Another $2k will get it usable as a daily with new-Miata-like performance. Another $15k will turn it into a supercar.

$90k can do a hell of a lot, if you do as much of the work yourself as you can.

I’d budget $15k to buying a plot of land and throwing a Home Depot shed on it as a build space if I had that $90k to work with. I’d still have plenty left over. My current bottleneck is free time.

A little something a friend and I built for less than $5k all in thus far:

https://i.imgur.com/vVuZKWt.jpg
https://i.imgur.com/82gCI0U.jpg

Bassracerx
Bassracerx
10 months ago

90 grand to buy one electric vehicle I would go Lucid that car is amazing to me I would be totally okay with the base model 500 horsepower and 700lb or torque and nearly 400 mile range!

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