Tesla CEO Elon Musk says the automaker will reduce the price of the Model S again after Lucid Motors tried to undercut them with the base version of the Air.

Yesterday, Tesla reduced the price of the Model S by $3,000 to $71,990.

Today, Lucid announced the price and specs of the base version of the Air, its luxury electric sedan expected to compete with the Tesla Model S.

The price starts at $77,400 before incentives ($69,900 after federal tax credit) and it has a range of 406 miles — 4 more miles than the Model S.

Tesla CEO Elon Musk seems to have noticed the move since he has now announced that Tesla will lower the price of the Model S even further:

He announced that the price will change again tonight to $69,420. Yes, that’s the third richest man in the world making a ’69’ and weed joke that is known to be mostly funny to 12-year-old boys.

Tesla buyers don’t have access to the federal tax credit for electric vehicles in the US anymore, but the price will still be lower than Lucid Air.

It will be the third time this year that Tesla has slashed the price of the Model S.

The electric sedan started the year at $80,000.

Electrek’s Take

As we have been reporting during the launch of the Air, it looks like we are starting to witness the start of a healthy competition between Tesla and Lucid.

Both companies have been bringing their top performance prototypes to the Laguna Seca racetrack to beat each other’s records.

In some ways, Lucid spun out of Tesla.

It was founded by a Tesla director back when it was called Atieva and now it is led by Peter Rawlinson who used to be the chief engineer of the Model S program.

Elon even belittled Rawlinson’s contribution to Tesla, which makes me think that he is taking Lucid seriously.

Anyway, competition is good.

It will push the industry faster.

However, I don’t get Tesla’s additional price drop on the Model S. The base version of the Air is not coming until early 2022.

The Model S is available right now.

I don’t think it will make a big difference for Tesla until Lucid starts actually delivering the Air — even the higher-end versions next year.

What Model S really needs is an interior refresh — something Tesla has been delaying since last year.

Tesla dropped the price of the Model S by $8,000 this year alone and sales are still going down. I doubt the price will have a big effect at this point.

If people want a cheaper Tesla, they will buy a Model 3 at that point.

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