Tesla has cut the prices of some of its Model Y and Model 3 electric vehicles in the United States for the sixth time this year, according to the company’s website. The move is believed to be a response to concerns about the effect on its profit margins. The company has lowered 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 Austin, Texas-based company has cut the prices of its base Model 3 by 11% and its base Model Y by 20% so far this year, with the United States being its largest market. This comes as the country prepares to introduce tougher standards that will limit EV tax credits. In addition, Tesla has lowered prices in Europe, Israel, and Singapore, as well as in Japan, Australia, and South Korea. The discount drive was first initiated in China in January to stimulate demand.
However, despite the price cuts, Tesla reported a 4% sequential rise in deliveries in the first quarter, which was significantly less than the 17.8% sequential rise in the previous quarter. This has raised concerns about the company’s industry-leading profit margins.
Analysts’ average profit estimate has fallen by about 2.4% in the last three months, according to Refinitiv data. Nevertheless, Tesla is expected to report a 24.2% year-on-year increase in first-quarter revenue to $23.29 billion. The company’s financial performance will be closely watched as it announces its January-March quarter results on Wednesday.
