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The cuts came ahead of the electric-vehicle maker's
first-quarter earnings due on Wednesday and sent the stock down
2.5% in premarket trading. Shares have risen just a little under
50% this year, after posting their biggest annual drop in 2022.
Tesla's website showed late on Tuesday that it cut prices of its
Model Y 'long range' and 'performance' vehicles by $3000 each
and of its Model 3 'rear-wheel drive' by $2,000 to $39,990.
The company cut U.S. prices of its base Model 3 by 11% so far
this year and that of its base Model Y by 20% – moves that come
as the United States, its largest market, prepares to introduce
tougher standards that will limit EV tax credits.
It also recently lowered prices in Europe, Israel and Singapore,
as well as in Japan, Australia and South Korea, expanding a
discount drive it started in China in January.
Still, Tesla reported a sequential rise of just 4% in its
first-quarter deliveries, much less than the 17.8% sequential
climb in the prior quarter.
That has prompted several analysts to predict more price cuts as
competition rises at home from rivals such as Ford Motor Co and
Tesla plays catch-up with BYD in China, its second-largest
market.
For the first quarter, Wall Street expects the company's auto
gross margin to hit a more than three-year low of 23.2%,
according to 17 analysts polled by Visible Alpha.
Its revenue is expected to rise 24.2% year-on-year to $23.29
billion, but analysts' average profit estimate has fallen by
about 2.4% in the last three months, according to Refinitiv
data.
(Reporting by Abinaya Vijayaraghavan and Aditya Soni in
Bengaluru; Editing by Rashmi Aich, Savio D'Souza and Sherry
Jacob-Phillips)
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