Benzinga - by Rounak Jain, Benzinga Staff Writer.
Tesla Inc. (NASDAQ:TSLA) investor refuted reports that Elon Musk’s EV giant has rolled out significant price cuts for its Model Y sport utility vehicles (SUVs) in a bid to clear its largest-ever stockpile.
What Happened: According to a Bloomberg report on Friday, the electric vehicle (EV) manufacturer is reducing the prices of its Model Y SUVs currently in stock.
The rear-wheel drive version will now be available for $4,600 less than the cost of a custom order, while the long-range and performance Model Ys are being discounted by at least $5,000.
This move comes after Tesla produced 46,561 more vehicles than it delivered in the first quarter, leading to an unprecedented increase in its inventory.
The company attributed its global sales decline to the transition of its California plant to produce the upgraded Model 3 sedan and the temporary shutdown of its German factory.
Reacting to the news, Tesla investor Sawyer Merritt said, “Tesla hasn’t done anything new. These exact inventory discounts have been around since last year. Nothing has recently changed.”
Tesla hasn't done anything new. These exact inventory discounts have been around since last year. Nothing has recently changed. pic.twitter.com/1uJrG8zG7P— Sawyer Merritt (@SawyerMerritt) April 5, 2024
Tesla did not immediately respond to Benzinga's request for comment.
Why It Matters: This is not the first time Tesla has cut prices to manage its inventory.
Earlier this year, the company temporarily reduced the price of its Model Y in the U.S. and also offered discounts on Model Y inventory vehicles in the United States.
The current price cuts, however, are the most significant so far.
Despite these efforts, Tesla’s stock has been on a downward trend, with shares falling for four consecutive session. The company’s decision to cut prices may be an attempt to address its unprecedented backlog of inventory and boost sales.
Price Action: Tesla’s stock was trading at $165.48, down 3.2% at the time of publication on Friday, according to Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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