Tesla launches cheaper Model S, X versions in US with shorter ranges

Tesla (TSLA.O) on Monday launched cheaper variants of its Model S sedan and Model X SUV with shorter driving ranges in the U.S., looking to increase sales as high borrowing costs hamper demand for expensive electric vehicles.

Tesla shares were down 2.6% on Tuesday, while rivals also lost ground as investors worried about a price war. Rivian (RIVN.O) fell by 3.5% while Lucid (LCID.O) lost 5.6%.

Tesla has already slashed prices of its vehicles in the U.S., China and other markets, prioritizing sales growth over profit margins.

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.

The new S and X “standard range” models are priced at $78,490 and $88,490, respectively.

Model S has a driving range of up to 320 miles (515 km), lower than the regular dual motor and tri-motor Plaid variants that offer up to 405 miles and 396 miles, respectively.

Model X SUV has range of up to 269 miles, well below its more expensive versions that offer up to 348 miles.

Both models will have the same battery and motors as the dual motor variants that cost $10,000 more, but their performance and range will be limited by software, a Tesla sales representative said.

Another sales representative said Tesla does not have a plan to offer a firmware update to unlock the range and performance in the future.

This report’s information was first seen on REUTERS; to read more, click this link.