Tesla cuts US prices for sixth time this year ahead of Q1 results
TESLA cut prices for some of its Model Y and Model 3 electric vehicles (EV) in the United States, its website showed late on Tuesday (Apr 18), the sixth time it has lowered US prices this year amid concerns about the effect on its profit margins.
Tesla, which is due to report January-March quarter results on Wednesday, cut the prices of its Model Y ‘long range’ and ‘performance’ vehicles by US$3000 each and that of its Model 3 ‘rear-wheel drive’ by US$2000 to US$39,990.
The Elon Musk-led company has cut US prices of its base Model 3 by 11 per cent so far this year and that of its base Model Y by 20 per cent-moves that come as the United States, its largest market, prepares to introduce tougher standards that will limit EV tax credits.
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 per cent sequential rise in deliveries in the first quarter, much less than the 17.8 per cent sequential rise in the fourth quarter.
Alongside that, the aggressive price cuts have also raised concerns about the Austin Texas-based company’s industry-leading profit margins.
While Tesla is expected to report a 24.2 per cent year-on-year increase in first-quarter revenue to US$23.29 billion, analysts average profit estimate has fallen by about 2.4 per cent in the last three months, according to Refinitiv data.
Tesla’s stock price has risen a shade under 50 per cent this year through Tuesday. REUTERS
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