April 18 (Portal) – Tesla Inc (TSLA.O) has cut prices on some of its Model Y and Model 3 vehicles in the United States for the sixth time this year in a bid to meet demand as competition among electric vehicle manufacturers around the world.
The cuts come ahead of Tesla’s first-quarter results, which are due after the market close on Wednesday, which will show how previous cuts have impacted Tesla’s industry-leading profit margins.
Tesla has slashed prices in numerous markets around the world to stay ahead of old U.S. rivals like Ford Motor (FN) while seeking to catch up with Chinese automakers like BYD Co Ltd (002594.SZ) in its second-biggest market .
Tesla shares fell 2.3% in morning trade. The stock is up a little less than 50% this year after posting its biggest annual decline in 2022.
The company’s website showed late Tuesday that it was slashing the prices of its Model Y “Long Range” and “Performance” vehicles by $3,000 each and its Model 3 “Rear-Wheel Drive” by $2,000 to $39,990 has.
Tesla has cut U.S. prices of its base Model 3 by 11% and its base Model Y by 20% so far this year. These moves come as the United States, its largest market, prepares to introduce stricter standards that will limit EV tax credits.
Prices in Europe, Israel and Singapore as well as in Japan, Australia and South Korea were also recently reduced and a discount campaign started in China in January was extended.
Tesla has been able to stay ahead of major U.S. and Japanese automakers gaining a foothold by lowering sticker prices on EVs, but Chinese automakers are beginning to take the lead in this and other markets with even cheaper offerings.
However, Tesla’s 4% sequential increase in first-quarter deliveries was much smaller than the previous quarter’s 17.8% sequential increase.
In 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 over year to $23.3 billion, but analysts’ average earnings estimate is down about 2.4% over the past three months, according to Refinitiv data.
Reporting by Abinaya Vijayaraghavan in Bengaluru; Edited by Rashmi Aich
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