Tesla’s pricing strategy comes down to one key difference from its competitors, and as the automaker recently cut pricing for the fifth time this year, the method to its madness is being further examined.
Tesla’s most recent price cuts on Friday are a far cry from its most drastic, which came in January after the Model Y was discounted by $13,000, nearly 20 percent on some trim levels.
While legacy automakers are not prone to cut prices by that much, Barron’s notes in a recent article that substantial price cuts for these companies are usually $1,000, and not the $13,000 that Tesla is able to apply to its vehicles because of its dealership model:
“Tesla, of course, doesn’t have a traditional dealer network. It is both car maker and car dealer. That is one reason investors should expect more volatility from Tesla versus its competition. All of its discounts are visible. Dealer-related discounts rarely rise to become investor-level news.”
Tesla customers have a distinct advantage in terms of consumerism, as they avoid basically the most stressful part of car buying, and that’s pricing. All too often, people who are at dealerships to buy a car are stuck wondering if someone else bought the same model for a lesser price, if they should have haggled more, and if there was more negotiating to be done.
The direct-to-consumer model has changed this.
The dealership model is not the only reason for the price cuts, but it is one major influence. Legacy automakers like Ford and GM are often cutting prices to clear their lots, bringing new vehicles to their inventories, and generating revenue for the larger corporation.
The reasoning for Tesla’s massive price cuts all depends on who you ask. Some analysts will say it is to recapture market share, and Tesla has the ability to control prices to manipulate competitors and consumer interest in their products. Others will say it is to counter weakening demand, although Tesla’s delivery figures increase quarter-over-quarter regularly.
Tesla can almost utilize its price cuts as a PR campaign. Meanwhile, an example of a BMW iX being cut by $10,000 without the customer asking was told by auto analyst Mike Ward. These stories do not make it to the media.
Meanwhile, Tesla’s price cuts apply to everyone and these broad market adjustments make for mass exposure, showing the company reduces prices.
“I assume Tesla’s strategy is based on the assumption of customer retention,” Nicholas Colas of DataTrek said. “Car buyers are a notoriously fickle lot, with only about 50 percent brand loyalty at the next purchase. Maybe a new technology like EVs is different, with higher retention.”
Lower prices will impact Tesla’s margins, which are among the strongest in the industry. However, more important is the retention of its customer base and a growth in sales as it still is only delivering a fraction of what legacy automakers will this year, even if their figures count ICE vehicles.
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Tesla launches new Model S and Model X, and the changes are slim
Tesla’s newest versions of its flagship vehicles have arrived with some slim changes.
Tesla has officially launched the newest versions of its flagship Model S and Model X vehicles, but the changes are pretty slim, which is something we expected when a couple cars were spotted during public testing recently.
The new “refreshed” Model S and Model X were spotted recently by The Kilowatts, and the changes appeared to be a new front camera, a new color, and only a handful of other changes.
Tesla officially announced the launch of the Model S and Model X on Thursday night, and here’s what it listed as the changes to the two vehicles:
Model S & X are now even better – launching today in the US 🇺🇸
Highlights:
– Frost Blue paint color
– Up to 410 miles of range (Model S Long Range – our longest range Tesla yet)
– Even quieter inside: less wind + road noise & more effective Active Noise Cancellation
– New… pic.twitter.com/i4PcEklOWj
— Tesla (@Tesla) June 13, 2025
- Frost Blue paint color
- Up to 410 miles of range (Model S Long Range – our longest range Tesla yet)
- Even quieter inside: less wind + road noise & more effective Active Noise Cancellation
- New wheel designs & improved aerodynamics = more range
- Front fascia camera for better visibility
- Dynamic ambient lighting that brings unique animations along the dash & doors upon entry
- An even smoother ride thanks to new bushings & suspension design
- Adaptive driving beams
- New exterior styling for Model S Plaid, optimized for high-speed stability
- More space for 3rd row occupants & cargo (Model X)
We expected most of these changes, especially the new Frost Blue paint color, as it was spotted by The Kilowatts in its initial coverage of the cars being spotted a few weeks back. Here’s what it looks like officially:
Some of the changes are familiar from the Model Y Refresh, which featured the quieter interior through acoustic-lined glass, a front fascia camera, new bushings, and suspension improvements for a smoother ride.
However, Tesla did refine the Model S Plaid’s exterior for “optimized high-speed stability.” You can see the difference between the two below:
The front-end air diffusers are much deeper, and the front end is more boxy than the previous iteration of the Plaid Model S.
Here are some more images of the Model S that Tesla released in a teaser video:
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- Credit: Tesla
Tesla sells such a low volume of the Model S and Model X that it was probably less than likely that the company would put endless manpower and effort into completely redesigning it. CEO Elon Musk said a few years ago that the two cars would only stay in production for “sentimental reasons.”
While they are very special to the Tesla family, they are not incredibly important to the mission of the company.
Elon Musk
Tesla owners across the globe prepare for Robotaxi launch with this neat customization
Tesla will eventually have Robotaxis worldwide. Some owners are already preparing.
Tesla owners are already preparing for the company’s launch of the Robotaxi platform with a new, neat customization that is appearing around the world.
On Tuesday, the first Tesla Robotaxi test mule was spotted in Austin, where the company will launch the first driverless rides of this ride-hailing service. At first, it will be a limited rollout, reserved for a select few. CEO Elon Musk said public rides could occur as soon as June 22.
First Tesla driverless robotaxi spotted in the wild in Austin, TX
However, the Tesla Robotaxi platform is not one that will be confined to cities and geofenced to certain areas.
Eventually, Tesla will gain enough confidence to roll the Full Self-Driving software straight to every car in the customer fleet that paid for it. Owners will be able to generate income for themselves while they sleep, as the cars will operate as ride-hailing vehicles for people to use for transportation.
In an effort to prepare for the launch of Robotaxi, Tesla owners across the globe are installing Tesla’s ‘Robotaxi’ word art on their cars.
Here’s one in South Korea:
🚨ROBOTAXIS SPOTTED IN 🇰🇷SOUTH KOREA TOO! $TSLA
It’s not official, just vinyl wraps, but you should sell these!pic.twitter.com/mViKuIV96P pic.twitter.com/fuYpvuOjic
— Tesla Archive (@tesla_archive) June 12, 2025
Here’s another in the U.S.:
🚀 Transform your ride into a vision of the future with our Robotaxi sticker set. 🌟
Your Tesla isn’t just a car—it’s a symbol of innovation and style. Be the trendsetter you were born to be and let your vehicle spark inspiring conversations wherever you go. ✨😎
Grab yours… pic.twitter.com/wTJPmnsO1X
— TESBROS (@teslabros) June 12, 2025
Obviously, this is more of a symbol of support for the Robotaxi launch, but many owners are recognizing that Tesla’s Full Self-Driving software will extend to them the ability to use their personal cars as ride-hailing vehicles, becoming a part of the global fleet of self-driving chauffeurs.
These are unmodified Tesla cars coming straight from the factory, meaning that every Tesla coming out of our factories is capable of unsupervised self-driving! https://t.co/n94ln0Uas6
— Elon Musk (@elonmusk) June 10, 2025
Elon Musk
Tesla sues former Optimus engineer for stealing trade secrets
Tesla is suing a former engineer who worked on Optimus after he left and immediately started a robotics company that achieved quick development of a hand.
Tesla is suing former Optimus engineer Jay Li in federal court after accusing him of stealing trade secrets and using them to enable a startup he founded after he left.
Li is accused of stealing confidential files and using them to help get his company, “Proception,” off to a rocking start. Tesla says the files Li took helped his new startup “shortcut the typical development process” for robot hands, something that took Tesla years to develop and evolve.
The company said in the complaint (via Reuters):
“Through Li’s pilfering, Defendant Proception purportedly achieved in a matter of months what it has taken Tesla over four years, hundreds of employees, and billions of dollars to achieve.”
Li was an employee at Tesla for several years, working on the Optimus sensor team from 2022 to 2024. The company says it utilized and devoted “extraordinary resources” to the development of Optimus, which has come a long way since its unveiling several years ago.
Tesla Optimus to receive hands with 22 degrees of freedom later this year
Li allegedly downloaded confidential files related to Optimus’ robotic hand movement research before departing the company. He did not work on the hands at the time. However, he left and swiftly started Proception, as the suit states the company was founded just six days after he left Tesla.
Proception was gloating about its ability to build robotic hands just five months after the company was founded. Tesla says the hands have “striking similarities” to its own design for Optimus.
The company is looking for monetary damages and a court order that would block Proception from misusing the secrets it accuses Li of taking.
This is not the first suit Tesla has filed over trade secrets and confidential information theft. Recently, it accused German-Canadian dual citizen Klaus Pflugbeil of stealing battery-related secrets. He was arrested and sentenced to two years in prison.
Men accused of selling Tesla battery secrets arrested in undercover sting
The U.S. Department of Justice used an undercover sting to arrest Pflugbeil.
Tesla is being represented by Josh Krevitt, Orin Snyder, and Angelique Kaounis of Gibson Dunn & Crutcher.
The case is Tesla Inc. v. Perception Inc., U.S. District Court for the Northern District of California, No. 5:25-cv-04963.
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