Tesla Raises Model S and X Prices by $5,000 in US Amid Upgrades to 2025 Models

The electric vehicle giant has introduced performance and technology enhancements to its Model S and Model X, marking the first major price increase for these luxury EVs in over a year.

Tesla has announced price increases of $5,000 for its Model S and Model X vehicles in the United States, coinciding with a series of upgrades to the 2025 versions of these flagship electric vehicles (EVs). This marks a strategic pivot by the automaker as it enhances performance, refreshes design elements, and shores up its premium EV offerings amid intensifying market competition.

Model S and X Receive Upgrades and Higher Price Tags

Tesla updated its online configurator on June 13 to reflect the new pricing structure. The base Model S now starts at $79,990, up from $74,990, while the Model X's starting price jumps to $89,990 from $84,990. The price hikes follow a period of steady reductions over the past year that aimed to boost sales amidst slowing demand in the U.S. luxury EV segment.

In its announcement, Tesla detailed a raft of 2025 upgrades to both the Model S sedan and Model X SUV. The enhancements focus on improved performance, refined interiors, and updates to the onboard technology.

Key Upgrades for 2025 Tesla Models

The new Model S and Model X variants boast several significant changes:

Performance: Improved acceleration and enhanced range due to updates to the battery management and powertrain systems.

Interior: New material finishes, more ergonomic seating, improved sound insulation, and a refreshed user interface on the center screen.

Technology: Upgrades to Tesla’s in-car entertainment system, expanded Autopilot features, and enhanced connectivity.

Tesla has also reported the introduction of new paint choices and optional premium packages to further differentiate its top models from rivals such as Mercedes-Benz EQS, Lucid Air, and Porsche Taycan.

Pricing Strategy: A Return to Premium

After a series of price reductions throughout 2023 and 2024—which saw Model S prices drop well below $80,000—Tesla is signaling a renewed commitment to the luxury segment. According to auto industry analysts, the price hike could be aimed at reinforcing Tesla’s premium brand positioning while offsetting rising costs and increased R&D investment in vehicle upgrades.

“Tesla’s price increase reflects both the ascendant costs of technology and the fiercely competitive luxury EV market,” said Jessica Caldwell, Executive Director of Insights at Edmunds. “It suggests Tesla is confident that unique upgrades and brand equity will sustain demand, even at a higher price point.”

Context: Slowing EV Sales and a Shifting Market

The timing of Tesla’s decision comes as U.S. EV sales growth moderates from pandemic-era highs. According to Cox Automotive, first-quarter 2025 EV sales in the U.S. rose just 3% year-over-year—down from double-digit growth seen in previous years.

The Model S and Model X accounted for just over 5% of Tesla’s global deliveries in 2024, as the company increasingly focused its volume strategy on the more affordable Model 3 and Model Y. However, Tesla’s luxury models remain crucial in maintaining technological leadership and fostering the company’s premium image.

Industry Perspectives and Consumer Reaction

While some analysts believe the upgrades will help the Model S and X compete with new luxury EV entrants, others caution that higher prices could further shrink their already-niche market share. “Raising prices in a cooling market is a risk,” noted Ivan Drury, Senior Manager of Insights at Edmunds. “Tesla is betting that technological advancements and continued brand loyalty will outweigh sticker shock.”

Early reactions on social media and Tesla forums reflect mixed sentiments among prospective buyers and longtime enthusiasts. While improvements to range and technology have been praised, some customers have expressed frustration at the abrupt price increase, questioning whether the enhanced features merit the jump.

What Comes Next for Tesla’s Luxury EVs?

With market pressures mounting and legacy automakers intensifying their EV push, Tesla’s pricing and upgrade strategy for the Model S and X is being closely watched. The company is expected to provide more details on vehicle specifications, delivery timelines, and additional features in the coming months. Analysts will be monitoring order volumes and customer feedback to gauge the impact of these changes on Tesla’s market share.

Tesla’s $5,000 price increase for the Model S and Model X amidst sweeping 2025 upgrades marks a pivotal moment for the automaker’s luxury EV strategy. As Tesla balances innovation, cost pressures, and evolving consumer expectations, the updated models' reception may offer early signals about the future direction of the high-end electric vehicle market.

Sources:

Reuters: Tesla upgrades its Model S, X cars in US, raises prices by $5,000

Cox Automotive quarterly EV sales report, Q1 2025

Edmunds.com commentary on Tesla pricing strategy

Social media/user forums for consumer sentiment