Benzinga - by Shanthi Rexaline, Benzinga Editor.
Electric vehicle giant Tesla, Inc. (NASDAQ:TSLA) on Saturday implemented a temporary price cut on its Model Y in the U.S. Incidentally, the Model Y was the best-selling car in the world in 2023.
What Happened: Updated pricing available on Tesla’s U.S. Model Y configurator page showed $1,000 price reductions for the rear-wheel drive and long range all-wheel drive variants. The catch is that the reduced pricing is available only until Feb. 29. The price cut will be reversed beginning March 1.
The Model Y Performance price remained unchanged.
The starting price of the RWD variant is now at $42,990 and that of the the long range variant is at $47,990, while the performance variant’s price remains unchanged at $52,490.
Eligible buyers can receive $7,500 federal tax credit, which will be deducted from the purchase price of all new 2024 Model Ys at the time of delivery.
A buyer can take possession of a RWD variant for as little as $35,490, the long range variant at $40,490 and the performance variant at $44,990.
The company has also made its leasing option further attractive by taking down the down payment by as much as $2,000, Tesla influencer Sawyer Merritt pointed out. The down payment for the $379-per-month leasing option is now at $2,400 compared to $4,500 last month, he said.
Why It’s Important: The latest price cuts in the U.S. comes after a lull. After reducing prices successively beginning in early 2023, Tesla stalled its price cutting spree late last year. The price cuts did little to improve sales amid slowing EV adoption. On the other hand, they eroded margins. The company has reported below-consensus earnings and revenue for two straight quarters now.
Given Saturday’s price cuts are temporary, they may not trigger a negative stock reaction.
Social media users began to speculate that the price cuts intended for next Thursday were pulled forward to capitalize on the increased traffic Tesla normally gets to its website during the week of the Super Bowl.
Tesla recently lowered its Model Y prices in Canada twice.
The price reduction triggered rumors that the company could be trying to clear inventories before launching a refreshed Model Y. Drive Tesla Canada reported that the company clarified to employees that a refresh is not in the works in North America this year.
“It is important we communicate transparently that there is no refresh for the Model Y launching this year,” the company said reportedly.
Tesla ended Friday’s session up 2.12% at $193.57, according to Benzinga Pro data.
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