Elon Musk’s Tesla has made significant price cuts to its Model 3 compact sedan and the Model Y SUV in the United States, intensifying its ongoing price war. This move comes shortly after the company’s third-quarter deliveries fell short of market expectations.
In an effort to achieve its annual goal of delivering 1.8 million vehicles, Tesla is aiming to set a new record by delivering 476,000 vehicles in the last quarter of 2023.
The price reductions, which started in January, are part of Tesla’s strategy to support sales in an uncertain economy and compete against rivals like Ford and China’s BYD. The recent cuts range from 2.7% to 4.2%.
Despite the market weakness and concerns about the impact on the company’s margins, Tesla’s shares fell 2.1%.
The standard Model 3 sedan is now priced at $38,990, making it $1,250 cheaper. Similarly, the Model Y long-range variant costs $48,490, which is $2,000 less, according to Tesla’s website.
Tesla has also reduced prices for its higher-priced variants of the two models. Since the beginning of the year, prices for the standard Model 3 have dropped by approximately 17%, while the Model Y long-range variant has seen a decrease of over 26%.
These price cuts will add pressure on the “Detroit Three” automakers as they navigate through an unprecedented strike by autoworkers’ unions. Non-unionized companies like Tesla and Toyota are expected to benefit from any new contract with the union, as it may drive up costs for the “Detroit Three.”
Tesla is scheduled to announce its third-quarter earnings on October 18. Analysts polled by Visible Alpha anticipate a significant drop in automotive gross margins for the quarter, from a record margin of over 32% in the first quarter last year to an expected 19.1%.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
