Tesla Lowers Starting Price Of Selected EV Models
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Summary:
- TSLA stock's six-month fall is sitting around 37.8%.
- Tesla is lowering the starting price of its Model 3 and Model Y, in China.
- China, the world's largest EV market, is still constrained by Beijing's "zero COvid" policy.
Tesla car model price lowering
For the first time this year, Tesla is lowering the starting price of its Model 3 and Model Y cars in China.
After lowering pricing for the first time this year for cars built in China, Tesla (TSLA) shares continued to fall on Monday, indicating waning demand in the largest market in the world.
Just days after its third quarter earnings report echoed the impact of rising production costs and showed narrowing profit margins for the most valuable automaker in the world, Tesla reduced the starting price of its Model 3 sedan by about 5.3% and cut the cost of its Model Y by 9%. Tesla has been increasing the costs of its American-made cars for much of the year.
Tesla reported that due to an increase in input prices and expenses associated with the start-up of new plants in Austin and Berlin, gross automotive margins were 27.9%, a 600 basis point decrease from last year and unchanged from the amount achieved over the second quarter.
The company also warned that as it "simplifies operations, reduces costs, and improves the experience of our consumers," full-year deliveries "may fall slightly short of its 50% growth target."
In pre-market trading, Tesla shares were marked 3.5% lower to reflect an opening bell price of $207 per share, bringing the stock's six-month fall to about 37.8%.
Following record quarterly sales of 343,830 vehicles, Tesla stated last week that revenues increased 56% from the previous year to $21.45 billion, falling short of analysts' expectations of a $21.96 billion total. Demand is anticipated to decline over the course of the year as countries in Europe and North America hold off on major purchases due to recession fears and the continued rise in energy prices, while China, the world's largest EV market, is still constrained by Beijing's "zero COvid" policy.
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Sources: finance.yahoo.com, thestreet.com
