Tesla cuts prices again in US including another $3,000 off its Model Y

Bengaluru — Tesla cut prices for some of its Model Y and Model 3 electric vehicles in the US, its website showed late on Tuesday, the sixth time it has lowered US prices in 2023 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 $3,000 each and that of its Model 3 “rear-wheel drive” by $2,000 to $39,990.

The Elon Musk-led company has cut US prices of its base Model 3 by 11% so far in 2023 and that of its base Model Y by 20% — moves that come as the US, 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 earlier in  April, Tesla 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 the company's industry-leading profit margins.

While Tesla is expected to report a 24.2% year-on-year increase in first-quarter revenue to $23.29bn, analysts’ average profit estimate has fallen about 2.4% in the last three months, according to Refinitiv data.

Tesla’s stock price has risen a shade under 50% in 2023 to the close on Tuesday. 

Reuters