Tesla cuts US prices for the sixth time this year ahead of quarterly results

April 18 (Reuters) – Tesla Inc (TSLA.O) has cut the prices of some of its Model Y and Model 3 cars in the United States for the sixth time this year to boost demand as competition among electric car makers heats up around the world.

The cuts came ahead of Tesla’s first-quarter earnings, scheduled after markets close on Wednesday, that will show how previous cuts have affected Tesla’s industry-leading profit margins.

Tesla has slashed prices in many markets around the world to stay ahead of longtime US competitors like Ford Motor (FN), while scrambling to catch up with Chinese automakers like BYD Co Ltd (002594.SZ) in its second-largest market.

Tesla shares fell 2.3 percent in morning trading. The stock is up less than 50 percent this year, after posting its largest annual decline in 2022.

The company’s website showed late Tuesday that it had slashed prices for its “long-range” and “performance” Model Y sedans by $3,000 each, and its “rear-wheel drive” Model 3 by $2,000, to $39,990.

Tesla has cut US prices for its base Model 3 by 11% so far this year and prices for its base Model Y by 20%, moves that come as the US, its largest market, prepares to introduce tougher standards that would limit tax breaks for vehicles. electrical .

It also recently lowered prices in Europe, Israel and Singapore, as well as in Japan, Australia and South Korea, expanding the discount campaign it started in China in January.

Tesla has managed to stay ahead of the big American and Japanese automakers making their way into electric cars by lowering sticker prices, but Chinese automakers are starting to take a lead in this market and others with lower-cost offerings.

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However, Tesla’s quarterly rise of 4% for first-quarter deliveries was far less than the sequential rise of 17.8% in the prior quarter.

In the first quarter, Wall Street expects the company’s auto gross margin to drop to a more than three-year low of 23.2%, according to 17 analysts polled by Visible Alpha.

Revenue is expected to rise 24% year-over-year to $23.3 billion, but the average analyst estimate for earnings is down about 2.4% in the past three months, according to Refinitiv data.

Additional reporting by Abhinaya Vijayaraghavan in Bengaluru; Edited by Rashmi Aish

Our standards: Thomson Reuters Trust Principles.

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