Tesla has cut prices for some of its Model Y and Model 3 vehicles in the US, the sixth time the company has made such a move this year as it looks to spur demand even at the cost of its industry-leading profit margins.
The cuts came ahead of the electric-vehicle maker’s first-quarter earnings due on Wednesday and sent the stock down nearly 3 per cent in early trading. Shares have risen just a little under 50 per cent 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 per cent so far this year and that of its base Model Y by 20 per cent, a 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 per cent in its first-quarter deliveries, much less than the 17.8 per cent 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 and Tesla plays catch-up with BYD in China, its second-largest market.
Tesla shares fell after the carmaker cut prices in the US for the second time this month, further demonstrating Elon Musk’s willingness to sacrifice profitability for demand.
The emergency bureau of Shanghai’s Pudong district recommended an unspecified penalty for Tesla, the business news magazine Caixin and other outlets reported. They cited a copy of the report posted on the city government website.
The report was removed from the website on Wednesday. An employee of the emergency agency who would give only his surname, Wu, said Tesla asked for the report not to be made public because it contained photos of its production process. The investigation concluded the Tesla employee who died failed to follow rules and didn’t lock a safety gate, according to the news reports.