Tesla cuts US prices for sixth time this year ahead of quarterly results
Reuters
Published Apr 19, 2023 12:08AM ET
Updated Apr 19, 2023 10:47AM ET
By Abinaya V and Aditya Soni
(Reuters) -Tesla Inc cut prices for some of its Model Y and Model 3 vehicles in the U.S. for the sixth time this year to juice demand as competition among electric-vehicle makers heats up around the world.
The cuts came ahead of Tesla (NASDAQ:TSLA)'s first-quarter earnings, due after markets close on Wednesday, that will show how previous cuts have affected Tesla's industry-leading profit margins.
Tesla has slashed prices in numerous markets worldwide to stay ahead of legacy U.S. competitors such as Ford Motor (NYSE:F), while it strives to catch up with Chinese automakers such as BYD Co (OTC:BYDDF) Ltd in its second-largest market.
Tesla's shares fell 2.3% in morning trading. The stock has risen a little under 50% this year, after posting their biggest annual drop in 2022.
The company's website showed late on Tuesday that it cut prices of its Model Y "long range" and "performance" vehicles by $3,000 each and of its Model 3 "rear-wheel drive" by $2,000 to $39,990.
Tesla 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 United States, its largest market, prepares to introduce tougher standards that will limit EV tax credits.
It 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.
Tesla has been able to stay ahead of large U.S. and Japanese automakers that are making inroads in EVs by cutting sticker prices, but Chinese automakers are starting to take the lead in that market and others with even lower-cost offerings.
However, Tesla's quarter-over-quarter rise of 4% for first-quarter deliveries was much less than the 17.8% sequential climb in the prior quarter.
For the first quarter, Wall Street expects the company's auto gross margin to fall to a more than three-year low of 23.2%, according to 17 analysts polled by Visible Alpha.
Revenue is expected to rise 24% year-on-year to $23.3 billion, but analysts' average profit estimate has fallen by about 2.4% in the last three months, according to Refinitiv data.
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Written By: Reuters
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