2023-04-19 12:36:58
The stocks fell by regarding 2% before the start of trading
Tesla cut the price of its most-produced model for the second time in April, in another sign of CEO Elon Musk’s willingness to sacrifice the electric car maker’s profitability to boost demand.
The Tesla website showed that the electric vehicle maker cut the prices of its long-range Model Y sports car by 5.6% to $49,990, while the price of the Performance version was reduced by 5.2% to $53,990, while the cost of the Model Y went down. The basic “Model 3” fell by 4.7% to $39,990, according to what was reported by “Bloomberg”, and viewed by “Al Arabiya.net”.
Tesla shares fell 1.9% to $180.88 before the start of regular trading on Wednesday.
This is Tesla’s second price cut in the United States this month following several quarters of deliveries that fell short of some analysts’ expectations.
Despite this, the company is in a rare position among electric vehicle makers where it has big profit margins to move around, while others including Ford Motor and even new entrants such as Rivian Automotive and Lucid struggle.
After price cuts across the first Tesla lineup early this year, Musk said during an earnings call Jan. 25 that orders were running at nearly twice the rate of production. But the company hasn’t been able to maintain the supply-and-demand dynamic – deliveries in the first quarter were up regarding 4% from the previous three months, and Tesla produced nearly 18,000 more cars than it delivered to customers.
Despite a second round of price cuts for the Model S and Model X in early March, Tesla delivered just 10,695 units of those vehicles in the quarter, the lowest level since the third quarter of 2021.
Tesla is set to report first-quarter earnings on Wednesday in the US, where investors will focus on past price cuts taking their toll on profit margins.
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