Tesla's cheapest Model S just got cheaper

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Tesla's cheapest Model S just got cheaper

Not all Tesla's vehicles are seeing price cuts, however. Not only does one have to take into account a $7,500 federal income tax credit, but many states offer additional incentives and tax rebates that vary considerably. In addition, Tesla now includes its all-glass roof as a standard option.

However, in the meantime, the company is also taking steps to entice drivers for whom the Model S is now only just out of reach.

To this point, Elon Musk took to Twitter this past January and said Tesla models will undergo substantial revisions every 12 to 18 months.

The Model S still isn't "cheap" by any stretch of the imagination, but the pricing and option changes do mean your money goes farther at the entry-level for the vehicle lineup.

TSLA slashed the cost, allowing the Model S 60 owners to upgrade to a 75 kWh battery pack for a lower price. First, Tesla's lower-cost Model 3's July launch is approaching fast; its availability could cannibalize some Model S sales.

Unless you're willing to wait a while for Tesla's massively pre-ordered, cheaper Model 3 electric auto, you're looking at spending a pretty penny - or millions of them - to buy one of the company's other vehicles.

Those who already bought the 60-kWh version may be feeling some envy toward buyers of the new base model. The 100D base is increasing the price of the Model S by $5,000 and the Model X by $1,000.

Tesla's automotive gross profit margin is particularly important as the company brings its Model 3 to market later this year.

"Periodically, we have adjusted pricing and available options to best reflect the value of our products and our customers' preferences", Tesla told Cars.com in an emailed statement. The cheapest Model X, meanwhile, starts at $83,700 for the 75D.

So, what do you do if you just recently ordered a 60kWh Model S? We expect our total average selling price to remain nearly exactly the same. With the Model 3's more aggressive $35,000 starting price, Tesla will need robust gross profit margins from its higher-priced vehicles to help it manage the initial steep costs of Model 3 as the company ramps up the newer vehicle's production rate.

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