Tesla is slashing prices on some Model 3 and Model Y vehicles in the US, CNBC has learned. The automaker’s move, its second price cut in just over a month, comes after it missed market estimates for deliveries.
Tesla’s website now lists the Model 3 starting at $38,990, down from $40,240. Meanwhile, the Model 3 Long Range is now $45,990 (down from $47,240) and the Model 3 Performance has a new price of $50,990 (down from $53,240). In addition, the Model Y Performance SUV has dropped from $54,490 to $52,490.
These are small reductions compared to the nearly 20 per cent price cuts announced in September for the Model S and Model X EVs. They also pale in comparison to the March price cuts, which slashed up to $10,000 off the cost of the Model X. Tesla began toying with pricing in late 2022, when it slashed costs in the face of a slowdown in consumer spending and increased EV competition. The carmaker blamed its third-quarter slump on factory upgrades, which led to production downtime. Since January, Tesla has cut the cost of the Model 3 by around 17 per cent and the Model Y by 26 per cent.
CEO Elon Musk has signalled that he is willing to prioritise volume and market share over profit margins in the short term. “I think it makes sense to sacrifice margins in favour of making more vehicles,” he said in July. However, the carmaker believes it will still meet its 2023 targets. “A sequential decline in volume was caused by planned downtime for factory upgrades, as discussed on the last earnings call. Our 2023 volume target of approximately 1.8 million vehicles remains unchanged,” Tesla wrote in a statement this week.
