Tesla once again slashed prices on its top-selling vehicles in the US, marking the electric car company’s fourth price reduction this year as it aims to boost demand amid intense competition.
The cheapest available Model Y Dual Motor now costs 29% less than it did in mid-January, at $46,990.
Tesla’s lowest-priced vehicle, the Model 3 “Rear-Wheel Drive,” is currently available for $39,990 for the first time in years, Tesla’s website shows.
Tesla CEO Elon Musk discounted the price on the two popular models ahead of the EV giant reporting its first-quarter earnings after the bell on Wednesday.
Shares of Tesla were down nearly 3% in early trading.
Overall, shares have risen nearly 50% this year after posting the biggest annual drop in 2022.
The company cut US prices of its base Model 3 by 11% this year and that of its base Model Y by 20% – moves that come as the United States, its largest market, prepares to introduce tougher standards that will limit EV tax credits, Reuters reported.
Tesla also recently cut prices in Europe, Israel and Singapore, as well as in Japan, Australia and South Korea, expanding a discount drive it started in China in January.
Tesla’s first-quarter deliveries showed a 4% increase from the previous quarter, a sharp drop from the 17.8% sequential climb seen in the prior quarter.
As rivals like Ford Motor increase competition domestically and Tesla strives to catch up with BYD in China, its second-largest market, many analysts are predicting further price cuts.
“We’re not ‘starting a price war,’” Musk tweeted April 15. “We’re just lowering prices to enable affordability at scale.”
“There is plenty of demand for our products, but if the price is more money than people have, that demand is irrelevant,” he adderd.
Wall Street expects the company’s auto gross margin to hit a more than three-year low of 23.2% for the first quarter, according to 17 analysts polled by Visible Alpha.
Spurred by consecutive price cuts, Tesla’s first-quarter sales grew by 36%, but they still fell short of analyst expectations.
While its revenue is predicted to increase by 24.2% year-on-year to $23.29 billion, the average profit estimate by analysts has decreased by approximately 2.4% in the last three months, Refinitiv data shows.
Tesla could have lowered Model 3 prices to qualify more cars for the US government’s $7,500 EV tax credit, but some options would have made certain models exceed the $55,000 price limit, according to Associated Press.
Neither of Tesla’s slower-selling bigger models, the S and X, are eligible for tax credits, and their prices remained the same Wednesday.
With Post wires
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