Tesla cuts US Model S and Model X prices
Written by ABC AUDIO on March 6, 2023
(NEW YORK) — Electric carmaker Tesla slashed the prices of its two most expensive cars in the U.S., the automaker’s website showed on Monday.
The price cuts affected the performance version of the Model S and the more expensive Model X.
The move follows a previous cut in January that brought down prices worldwide as much as 20%.
Later that month, CEO Elon Musk said the discounts had significantly boosted car orders following the announcement.
“Price really matters,” Musk said on an earnings call. “I think there’s just a vast number of people that want to buy a Tesla car but can’t afford it.”
The move aims to further bolster demand as Tesla faces slowing sales and heightened competition.
At the outset of this year, Tesla reported disappointing sales for the last three months of 2022, which fell short of Wall Street expectations. Tesla delivered 405,000 vehicles from October through December; analysts anticipated 420,000 deliveries.
The news sent the company’s stock tumbling 12% in a single day.
In all, Tesla stock has fallen nearly 30% over the past year. Shares fell almost 2% in early trading on Monday after the price cut.
Tesla did not immediately respond to a request for comment.
Dan Ives, a longtime Tesla bull and managing director of equity research at Wedbush, applauded the price cuts on Monday.
“Tesla cutting Model S and X prices another smart strategic move by Musk & Co.,” Ives said on Twitter. “Lower price points have resonated well and spurred considerable demand.”
Musk, who acquired Twitter in late October, has drawn scrutiny over his apparent focus on the social media platform. Musk said in December that he would resign as head of Twitter when the company identifies a successor.
Previously, Musk has attributed Tesla’s falling stock price to rising interest rates, which typically hurt stockholders and benefit savers, who stand to gain from an uptick in the interest yielded by accounts held at banks.
The price cuts mark the third such announcement in recent months. The company said in December that it would offer $7,500 discounts on Model 3 and Model Y vehicles delivered in the U.S. that month.
Tesla remains the top seller of EVs in the U.S. but its lead has slipped in recent months as competitors offer a host of affordable alternatives, a S&P Global Mobility report showed in November.
The company held a 65% market share of newly registered electric vehicles in the U.S. through the third quarter 2022, a drop from 71% in 2021 and 79% in 2020, the report found.
“It’s always been our goal at Tesla to make cars that are affordable to as many people as possible,” Musk said on the earnings call in January. “So I think it’s a good thing, all things considered.”
Copyright © 2023, ABC Audio. All rights reserved.
