Tesla Motors Inc (NASDAQ:TSLA) began offering a wider array of customization choices for Model S buyers late last week. The company adjusted its pricing and options, and Jefferies analysts see this generally as positive, although they note that the effects will be difficult to see in the near term.
Tesla makes some changes
Pricing for the 60 kWh and 85 kWh batteries has increased by 2 percent, while the price of the P65 Performance model has decreased by 4 percent. All of Tesla Motors Inc (NASDAQ:TSLA)’s Model S sedans now have an HD backup camera and Xenon headlines as part of the standard package. Previously, these features were part of the tech package, which was a $3,750 add-on item for the sedan.
Parking sensors can now be added on to the tech package, indicating the automaker’s response to numerous requests from buyers to do this. Also the tech package is now a requirement for those who want the Smart Air Suspension option. Destination charges are also included in the base prices for the vehicles, and there’s no change net-net.
Pricing for some of the add-on features has changed as well. The all glass panoramic roof is now 67 percent higher, while the 21-inch wheels are 29 percent higher. Pricing for the Smart Air Suspension and the stereo upgrade are both more than 100 percent pricier than they were. Rear facing seats are more expensive as well, although the price of the tech package has declined slightly.
The effect of Tesla’s customization options
Analyst Elaine Kwei said the new options enable Tesla Motors Inc (NASDAQ:TSLA) to provide more customization for buyers of the Model S. She believes the new pricing model will not only improve the company’s margins but also help with distinguishing between buyers who are more or less price sensitive.
She continues to rate Tesla Motors Inc (NASDAQ:TSLA) as a Buy and maintained her $130 per share price target on the stock.
