Tesla cuts prices for Model 3, Model Y on the eve of first-quarter earnings
Tesla has cut the price of its Model 3 and Model Y electric vehicles for the second time this month. Now, Tesla’s most popular models will start at less than $40,000 before incentives.
The price cut came on the eve of Tesla’s first-quarter earnings report, when investors will be watching the automaker’s margins after a series of price cuts this quarter.
This year alone, Tesla issued discounts for the Model 3 and Model Y in the US in January and February, and for the Model S and Model X in March in an attempt to attract buyers as competition increases and the economy weakens.
In the past two quarters, the automaker has also slashed prices for its electric vehicles in Mexico, Europe and China, where it sparked a price war among its competitors.
In fact, the discounts boosted Tesla’s quarterly sales, with the automaker delivering a record 422,875 EVs in the first quarter. But analysts say the increase in sales could come at the cost of healthy margins, which are expected to hit a more than three-year low as a result. According to Visible Alpha, Tesla is expected to report an auto gross margin of 23.2%, down from 32.9% last year.
US prices for Model Y AWD, Long Range and Performance vehicles have been reduced by $3,000 each. Model Y AWD went from $49,990 to $46,990; Long Range from $52,990 to $49,990; and Yield of $56,990 to $53,990.
The cost of the Model 3 Standard Range RWD went from $41,990 to $39,990, which means that Tesla has offered a vehicle for less than $40,000 for the first time.
The Model 3 is the only Tesla model where its federal tax credit was lowered from $7,500 to $3,750 on Tuesday following the updated US Treasury battery sourcing guidance for the EV tax credit.
The price of the Model 3 Performance does not seem to have changed yet.