Tesla Inc cut the price of Model S “Long Range” sedan to $69,420

US electric vehicle maker Tesla Inc cut the price of its Model S “Long Range” sedan in the United States to $69,420, its website showed, following a tweet flagging the cut earlier on Wednesday from Chief Executive Elon Musk.

The cut is Tesla’s second this week for the high-end sedan, following a 4% cut to $71,990 on Tuesday. Tesla shares closed 3.3% higher at $461.30 on Wednesday and were little changed in after-hours trade.

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The company also on Tuesday reduced by 3% the price of its Model S in China, where it had previously cut the starting price of its Model 3 sedan, reports Reuters.

The starting price for Model S is now a thousand times that of a pair of red satin shorts that Tesla started selling in July for “$69.420” to poke fun at the company’s naysayers.

Tesla introduced its Model S in 2012, but in recent years the car has faced competition from the automaker’s less expensive, mass-market Model 3 sedan, launched in 2017, which currently starts at $37,990. The Model S makes up only around 5% of Tesla’s unit volume, said a Credit Suisse analyst in a client note on Wednesday.

The analyst said the Model S price reduction was likely in response to price cuts by electric vehicle startup Lucid Motors, which sells its luxury sedan Air model at a starting price of $69,900. That includes a $7,500 U.S. government electric vehicle tax credit, for which Tesla vehicles are no longer eligible.

The price cuts also come as competition in the electric vehicle market – long dominated by Tesla – heats up, with several automakers launching new electric vehicles next year.

Germany’s Daimler AG is scheduled to release an electric version of its Mercedes-Benz S-class luxury sedan, the EQS, next year. Analysts expect the EQS to be significantly more expensive than the Model S, however, with the latest version of the gasoline-powered S-class retailing at more than 100,000 euros ($117,500).

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