Tesla announced a new wave of price cuts on Friday, in a bid to boost demand after third-quarter deliveries fell short of Wall Street expectations.
The automobile giant reduced the prices of several versions of its Model 3 and Model Y in the United States, which had an immediate impact on its shares, which fell 2.3% at the market opening.
In a strategic move, Tesla lowered the base price of the Model 3 from $40,240 to $38,990. Additionally, the Model 3 Long Range version dropped from $47,440 to $45,990, and the Model 3 Performance dropped from $53,240 to $50,990. In the case of the Model Y Performance, its price was adjusted from $54,490 to $52,490. These cuts reflect the company's effort to maintain its leadership in an increasingly competitive market.
These price adjustments are a direct response to Tesla's third-quarter report, which revealed that the company delivered 435,059 vehicles, a figure below analyst estimates and the previous quarter. Tesla attributed this decline to planned shutdowns at the Giga Shanghai and Giga Texas plants, which affected its production capacity.
Despite the drop in Tesla shares in response to this news, it is important to highlight that the company has performed exceptionally well in 2023, with its value up 135% year to date. However, investors are showing caution due to the Federal Reserve's policies to keep interest rates higher for longer in response to persistent inflation and the strong U.S. economy.
Tesla seeks to regain its momentum and meet market expectations through strategic price cuts. While this could boost demand in the short term, the company faces ongoing challenges in a changing economic and regulatory environment. Investors are closely watching Tesla's development in this uncertain outlook.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the writer. Images are for illustrative purposes only and should not be used for making important decisions. By using this site, you agree that we are not responsible for any loss, damage or injury arising from the use or interpretation of the information or images.
