Benzinga - by Shanthi Rexaline, Benzinga Editor.
Tesla, Inc. (NASDAQ:TSLA) has gone back to a strategy that has been widely criticized as one of the main reasons for the electric vehicle maker’s current predicament. Late Friday, the company took down the price of its Model S, X and Y prices in the U.S.
What Happened: Updated pricing available on Tesla’s website showed that the prices of the dual-motor all-wheel drive Model S and the trimotor all-wheel drive Model S Plaid have been reduced by $2,000.
The changes are as follows:
- Model S: $72,990 ( down 2.7% from $74,990 previously)
- Model S Plaid: $87,990 (down 2.2% from $89,990 previously)
- Model X: $77,990* ( down 2.6% from $75,990 previously)
- Model X Plaid: $92,990 (down 2.2% from $90,990 previously)
- Model Y rear-wheel drive: $42,990* (down 4.5% from $44,990 previously)
- Model Y dual-motor AWD, Long Range: $47,990* (down 4.0% from $49,990 previously)
- Model Y dual-motor AWD, Performance: $51,490* (down 3.7% from $53,490 previously)
The previous prices were sourced from information provided by Tesla influencer Sawyer Merritt in a post on X.
BREAKING: Tesla has dropped all Model S trim prices in the U.S. by $2,000.• Model S Long Range: $72,990 (from $74,990)
• Model S Plaid: $87,990 (from $89,990) pic.twitter.com/TimfsaJDQ2
— Sawyer Merritt (@SawyerMerritt) April 20, 2024
Merritt also noted that Tesla has ended its referral program in the U.S. on April 30. “Qualifying referral orders placed by April 30, 2024, will continue to earn benefits upon delivery. Credits will still be redeemable until they expire,” the company apparently said in a communication to users. Earlier, Tesla Drive Canada reported about referral program expiry in select countries such as Australia, New Zealand, and South Korea.
Why It’s Important: Tesla typically announces price cuts late Thursday and the fact that it has pushed it back until after the market close suggests the company is wary of the announcement creating volatility in the stock.
Tesla shares ended down for a sixth straight session on Friday and the losing streak resulted in a cumulative loss of about 16%.
Tesla bulls and bears have been highly critical of the company’s price-cutting strategy, given the past results of the action. The multiple EV price cuts the company has announced since late 2022 in China and from the beginning of 2023 in the rest of the geographies have not served to lift volume. In the first quarter, deliveries declined year-over-year for the first time since the COVID-19-hit 2020-second quarter. This has given rise to fears that the company may be staring at a negative volume growth for 2024.
The core auto gross margin has suffered due to the price cuts and the action has also served to impact the EV industry as a whole, as the rest of the companies are forced to either follow suit and take a beating to their bottom line or stay pat and risk erosion in their market share.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
The price cuts culminate an event-filled week for Tesla as it announced a round of massive layoffs, including a couple of high-profile executives, and doubts about its sub-$30K EV plans intensified.
Tesla is scheduled to report its first-quarter results on Tuesday, with analysts, on average, estimating earnings per share of 51 cents and revenue of $22.34 billion, according to Benzinga Pro data. This compares to the year-ago’s 85 cents per share and $23.33 billion, respectively.
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