True, but it sounds like the base Model 3 also got a price cut.

So, if you’re in the market for a “cheap” electric car, you have a price cut. If you’re looking for a high end one, you have a price cut. It’s only if you’re looking for a “cheap, high end” electric car that your cost goes up.

That seems like a reasonable trade off for Tesla. Let the value buyers go for a Model 3, and push the premium buyers to the higher end. Plus, with the Model 3 released there may not be too many people getting the entry level Model S and X anyway.

> got a price cut.

from the full price, matching the reduction in incentives.

Good point

>Tesla also lowered the starting price of its mass-market Model 3 to $38,990.

Note that the price cut is offset by the 50% reduction in federal tax credits from $3,750 to $1,875.

I'd rather have the price cut than the tax credit it they are for the same nominal amount ($1,875). First, you don't pay taxes or licensing on that amount and second if you financed the car you don't pay interest on that amount.

I would bet their thought process is more that there is less competition in the longer range market, so they will do better. There are lots of options now if you don't need much range.

People are very reluctant to purchase BEVs that do not have mileage comparable to ICEVs because conceptually EVs aren't common place and people don't understand they can start the day with a full tank every day.

There's a portion of the market who will compromise range just to have a BEV and I would imagine the Model 3 has cannibalized most of that market from the S and X.

Honestly when you're talking about vehicles that cost almost 100k, it's hard to quibble over a few thousand dollars savings from a smaller battery.