Image credits: Tesla
Tesla lowered the price of its Model 3 and Y electric cars for the second time this month. Now, Tesla’s most popular models will start at less than $40,000 before incentives.
The price drop comes on the eve of Tesla’s first-quarter earnings report, as investors will be watching the company’s margins after a series of price cuts this quarter.
This year alone, Tesla has issued discounts for the Model 3 and Model Y in the US in January and February, and for the Model S and Model X in March in an effort to entice buyers as competition increases and the economy weakens.
Over the past two quarters, the automaker has also slashed the prices of its electric cars in Mexico, Europe and China, stoking a price war between competitors.
The discounts have already boosted Tesla’s quarterly sales, as the automaker delivered a record 422,875 EVs in the first quarter. But analysts say the increase in sales may come at the expense of healthy margins, which are expected to reach the lowest level in more than three years as a result. According to Visible Alpha, Tesla is expected to post gross vehicle margin of 23.2%, down from 32.9% last year.
Prices in the United States for the Model Y AWD and Long Range and Performance vehicles have been reduced by $3,000 each. Model Y AWD went from $49,990 to $46,990; Long term from $52,990 to $49,990; and performance from $56,990 to $53,990.
The cost of the Model 3 Standard Range RWD has increased from $41,990 to $39,990, marking the first time Tesla has offered a vehicle for less than $40,000.
The Model 3 is the only Tesla model whose federal tax credit was cut from $7,500 to $3,750 on Tuesday following updated US Treasury guidelines on battery sources for the electric vehicle tax credit.
The price of the Model 3 Performance doesn’t seem to have changed yet.
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