Tesla (NASDAQ: TSLA) announced fresh price cuts for some of its models, marking the sixth time it has lowered its US prices amid concerns the tough macro environment is weighing on the demand for electric vehicles (EVs).
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Tesla slashed the Model Y price by $3,000, affecting both the long-range and performance versions of the car. Similarly, the Model 3 rear-wheel drive price is slashed to $39,990 from $41,990.
The latest price cuts mean that the EV giant has slashed its US prices for basic Model 3 by 11% while the Model Y price is now lowered by as much as 20%.
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The new US price changes also come after the company reportedly slashed prices in Europe and Asia. The wave of EV price cuts was started in China in a bid to spur demand amid a difficult macro environment.
The price cuts have now placed a laser focus on Tesla’s auto gross margins, which are expected to decline to 23.2%. The EV titan is expected to report Q1 results today after market close with the Street expecting a 24.2% surge in year-over-year revenue to $23.29 billion, according to Refinitiv data.
“Tesla should be able to eke out a decent 1Q result, but defending that 20% clean auto gross margin ‘floor' may be a different story as ‘the world has changed' with respect to EV demand weakening relative to EV supply,” Morgan Stanley analysts said in their Q1 preview note released earlier this week.
The bank’s analysts also added they see “a window of opportunity” that could open up to new Tesla investors if shares underperform following the Q1 earnings release.
Going into the report, Tesla shares are up approximately 44.6% year-to-date (YTD).
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