Tesla’s Pricing Strategy

Unlike other automobile manufacturers, Tesla does not use geographical pricing
strategy.
Coming from highly sophisticated technology, the Tesla products are categorized in
premium pricing strategy owing to the huge material, Research, and Development
costs, but when compared to competitors like BMW electric cars, it still starts at a low
price. This was for a niche market that was more interested in high-quality products
with the latest technology irrespective of its price range because they could easily
afford such products.
Tesla’s Model S ranges from $69,000 - $140,000. Tesla Model Y ranges from $51,000 to
$61,000.The Model X is priced between $83,000 - $145,000.

 But keeping prices this high is not going to help achieve the vision of Tesla that is “a
world running on sustainable energy”. Therefore, the carmakers have launched the
Model 3 which is an affordable car with prices starting at just $35,000.
Tesla’s electric vehicles are expensive and customers are willing to pay extra for
driving electric vehicles, rather than traditional fuel vehicles, which are considered
advanced in terms of technology and ecology. Tesla Motors initially decided
to target wealthy buyers making a conscious decision to capture larger markets later
on with lower prices.
the company launched affordable products keeping in mind the mid-scale general
consumers. It wanted to capture a large part of the consumer market and hence
adopted a reasonable pricing strategy. This was a huge success as it was able to
sell a greater number of products and this resulted in higher profit margins and
greater revenues.

The electric automaker exercises the pricing policy of “always offering the same
prices everywhere aside from the difference through exchange rates and import
duties.” This is echoed in Elon Musk’s now-famous blog post in 2006 about the company’s
strategy that contains

1. Build sports car

2. Use that money to build an affordable car

3. Use that money to build an even more affordable car

Innovation and product design are significant factors in successfully using the
company’s approach to this part of the marketing mix. The company uses
the market-oriented pricing strategy for its solar panels and related products
(services) through the subsidiary SolarCity. It is expected that the company will
change or add new pricing strategies to account for new products and trends in the
transportation industry and energy solutions market.