Tesla has price cuts on some of its electric vehicles for the second time this month and the sixth time in 2023. Tesla cuts Model 3 and Y prices again for the sixth time ahead of the Q1 results. The cheapest Tesla is under $40,000. This being the latest set of discounts by Tesla at a significant rate.
In late April, the company cut $3,000 off the starting price of all three versions of the Model Y, Tesla’s top seller, reported TechCrunch. This represented about 6% off the lowest-priced version.
Tesla US price reductions
Ahead of earning report of Q1 Tesla’s US price has reduced.
Tesla has slashed prices for some of its Model Y and Model 3 electric vehicles in the United States, its website showed late on Tuesday, the sixth time it has lowered U.S. prices this year amid concerns about the effect on its profit margins.
Tesla’s latest price drop is of its Model Y ‘long range’ and ‘performance’ vehicles by $3000 each and its Model 3 ‘rear wheel drive’ by $2000 to $39,990.
The Elon Musk led company has cut U.S. prices of its base Model 3 by 11% so far this year and that of its base Model Y by 20%, moves that come as the US, its biggest market, prepares to introduce tougher standards that will limit EV tax credits.
But, Tesla officials said, the reason for the price drop was due to falling prices in the supply chain and logistics, so they could pass these savings on to the end user.
The company also recently lowered 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 to spur demand.
Yet, Tesla, earlier this month, reported a 4% sequential rise in deliveries in the first quarter, much less than the 17.8% sequential rise in the fourth quarter.
Alongside that, the aggressive price cuts have also raised concerns about Tesla’s profit margins.
Tesla Q1 results
Tesla reported $23.3 billion in revenue in Q1 results, 2023, meeting earnings expectation. The biggest news is likely the fact that the company managed to retain industry leading 19.3% gross margins on its automotive business despite the price cuts earlier this quarter.
Tesla’s stock price has risen a little under 50% this year, through Tuesday.
The company has been trying to increase interest with price cuts in Europe, Israel and Singapore as well as in Japan, Australia and South Korea.
“Tesla had a very, very strong year,” Vince Palomarez of S&P Global Mobility said in an interview with NPR. “They have produced a product that is attractive to a consumer.”
Brand loyalty might play a part in Tesla’s sales, but it seems likely that its newly competitive pricing will now contribute to more purchases.
“There is plenty of demand for our products, but if the price is more money than people have, that demand is irrelevant,” Elon Musk, Tesla’s CEO, said on Twitter.
