Editor TLN
() — Tesla cut prices in the United States between 2% and almost 6%, according to its website reflected this Thursday. This is because the company extended a discount campaign for its electric vehicles that analysts warn could hurt its profitability.
Tesla’s fifth such cut in the market since the start of the year comes as the United States prepares to adopt tougher standards this month that are expected to cap tax credits for electric vehicles.
Tesla cut prices on both versions of its Model 3 sedan by $1,000 and its Model Y crossover by $2,000, according to its website. It also slashed the prices of both its more expensive Model S and Model X versions by $5,000.
The company said the tougher US standards would reduce the $7,500 tax credit available for its base, rear-wheel-drive Model 3 that has been in effect since January.
Some analysts who had expected more price cuts had raised concerns that Tesla’s industry-record profit margins could be at risk.
This week, Tesla reported first-quarter deliveries of nearly 423,000 vehicles, just 4% more than the previous quarter, after price cuts were made in the United States, China and other markets aimed at stimulating demand.
Tesla has set a goal of 1.8 million deliveries this year.
The company cut the price of its base Model 3 by a cumulative 11% since the beginning of the year, with a 20% reduction on its base Model Y.
Reporting by Akriti Sharma in Bengaluru and Abhirup Roy in San Francisco; Edited by Kevin Krolicki and Clarence Fernandez
