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Tesla slashes Model Y, Model 3 prices again prior to Q1 results

Tesla's website indicated that it had reduced the cost of its "long-range" and "performance" Model Y and Model 3 vehicles.

For the sixth time this year, Tesla cuts the costs of certain of its Model Y and Model 3 vehicles in the U.S. in an effort to increase demand, even at the expense of its leading industry profit margins.

The reductions occurred before the EV manufacturer’s first-quarter earnings report and they caused the stock to decline by about 3% in early trading. After seeing their largest yearly decline in 2022, shares have increased by slightly under 50% this year.

Late on April 18, Tesla’s website indicated that it had reduced the cost of its “long-range” and “performance” Model Y vehicles by $3,000 apiece and of its “rear-wheel drive” Model 3 by $2,000 to $39,990.

While the United States, its largest market, gets ready to impose stricter requirements that would limit EV tax credits, the business has reduced the U.S. prices of its base Model 3 by 11% so far this year and those of its base Model Y by 20%.

In addition, the company recently lowered rates in Europe, Israel, Singapore, Japan, Australia, and South Korea, expanding a price-cutting effort that was started in China in January.

However, compared to the 17.8% sequential increase in the previous quarter, Tesla only announced a 4% sequential increase in first-quarter deliveries.

This has led some analysts to forecast further price reductions as domestic rivals like Ford increase competitiveness and Tesla catches up to BYD in China, its second-largest market.

Based on the 17 analysts surveyed by Visible Alpha, Wall Street anticipates the company’s car gross margin to drop to a more than three-year low of 23.2% in the first quarter.

Although Refinitiv data indicates that analysts’ average profit estimates have decreased by roughly 2.4% over the past three months, the company’s sales are anticipated to increase by 24.2% year over year to $23.29 billion.

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Jaelyn Campbell
Jaelyn Campbell
Jaelyn Campbell is a staff writer/reporter for CBT News. She is a recent honors cum laude graduate with a BFA in Mass Media from Valdosta State University. Jaelyn is an enthusiastic creator with more than four years of experience in corporate communications, editing, broadcasting, and writing. Her articles in The Spectator, her hometown newspaper, changed how people perceive virtual reality. She connects her readers to the facts while providing them a voice to understand the challenges of being an entrepreneur in the digital world.

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