Tesla Inc (TSLA.O) has once again reduced prices for some of its Model Y and Model 3 electric vehicles in the United States, as seen on its website late on Tuesday. This is the sixth time the company has lowered U.S. prices this year, as it faces concerns about its profit margins.
Ahead of its January-March quarter results announcement on Wednesday, Tesla cut the prices of its Model Y ‘long range’ and ‘performance’ vehicles by $3000 each and its Model 3 ‘rear-wheel drive’ by $2000 to $39,990. This year, Tesla has already reduced the U.S. prices of its base Model 3 by 11% and the base Model Y by 20%. This comes as the United States, Tesla’s largest market, prepares to implement tougher standards that will limit EV tax credits.
Tesla has also recently lowered prices in Europe, Israel, Singapore, Japan, Australia, and South Korea, expanding a discount drive it started in China in January to increase demand. Despite this, the company reported a sequential rise of just 4% in deliveries in the first quarter, compared to the 17.8% sequential rise in the fourth quarter. The aggressive price cuts have also raised concerns about the impact on Tesla’s industry-leading profit margins.
Refinitiv data shows that while analysts expect Tesla to report a 24.2% year-on-year increase in first-quarter revenue to $23.29 billion, their average profit estimate has fallen by about 2.4% in the last three months.
Despite these concerns, Tesla’s stock price has risen by nearly 50% this year through Tuesday.
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