How long will Tesla’s price slashing continue? This is the sixth time so far this year.
2023 is a high-pressure year for players in the EV game, with new tax credit rules in play and more competition for buyer dollars than we’ve seen yet. In that climate, Tesla has once again cut prices for its popular, more affordable Model Y and Model 3 cars in the United States, marking overall cuts to the entry-level models by 11-20% in the automaker’s largest market.
As of April 19, Tesla cut pricing on the rear-wheel drive Model 3 by $2,000, down to $39,990. Both the Model Y Long Range and Performance models see a larger $3,000 shave off their price, to $46,990 and $49,990 respectively.
The aggressive price cuts signal more compelling deals for consumers, but the decision may cut both ways for the Austin, Texas-based manufacturer. As Reuters notes, Tesla reported a sequential rise of 4% in its first-quarter deliveries, far short of the 17.8% climb in the prior quarter before the latest spate of price cuts.
Investors are also worried about Tesla’s gross profit margins, which Wall Street expects to shrink to 23.2%, a three-year low for the company. While its revenue is rising year-on-year thanks to better sales volumes, its stock prices falling by 3% in early trading show relative uneasiness. However, share prices did recover slightly in late-morning trading, ahead of the company’s earnings call today.
Most Model 3 and Model Y models are eligible for the full $7,500 federal tax credit
While the Treasury Department issued stricter guidance that cut many electric models out of the running for the revised credit, Tesla is one of the main beneficiaries for folks looking for the most possible incentives. Of the Model 3 and Model Y range, only the base rear-wheel drive model sees a $3,750 tax credit. All other variants, including the Model Y Long Range/Performance and the Model 3 Performance get the full $7,500 amount, assuming you have an income tax liability in that amount or higher.
Tesla also recently dropped prices in other markets, including Europe and Israel as well as Japan, Singapore, South Korea and Australia.
