Tesla Inc. shares fell Wednesday, after the electric-car maker again cut prices on its U.S. cars, just ahead of what’s expected to be a tough set of first-quarter results.
Tesla shares, which have rebounded 49% this year, after a 65% plunge in 2022, were down 2.5% in premarket trading.
Early Wednesday, Tesla’s TSLA, -1.46% website was reflecting price cuts of up to $3,000 on several electric cars. The base Model Y AWD now retails for $46,990, the Model Y Long Range for $49,990 and the Model Y Performance for $53,990, all reduced by $3,000 each. Tesla’s Model 3 was cut to $39,990, a drop of $2,000.
Tesla cut its Model 3 and Y prices in January, reducing Model S and X prices in March and again in early April, and began to offer a cheaper, short-range Model Y compact SUV. It has cut prices on its Model 3 sedan and recently expanded price cuts across Europe and Israel. Prices were also cut in China at the start of the year.
Tesla has been lowering the prices of its cars worldwide to stimulate demand as consumers face elevated inflation, and in a bid to bring more models in line with a $7,500 tax credit on new electric cars and plug-in hybrids. Those rebates are limited to SUVs, and vans with manufacturer’s suggested retail prices of up to $80,000 and cars up to $55,000.
Read: Electric-vehicle tax credit: See which EVs qualify on updated list
Fresh price cuts from Tesla, due to report results after Wednesday’s close, would not be a surprise to many analysts who have been expecting those reductions to continue. For that reason, lots of attention will focus on Tesla’s gross margin — a measure of profitability that will show how much money it has made after subtracting costs of production.
“Pricing of the Model 3 is now –11% lower, while the Model Y is more than 20% lower than at the start of the year after a series of price cuts. All these price cuts are bound to show up in margins,” said Neil Wilson, chief market analyst for Finalto & Markets.com, told clients in a note.
Analysts polled by FactSet expect the EV maker to report adjusted earnings of 86 cents a share on sales of $23.8 billion, versus adjusted EPS of $1.07 a share on sales of $18.8 billion in the first quarter of 2022.
This article was originally published by Marketwatch.com. Read the original article here.
