Tesla trimmed U.S. prices on all its vehicles Thursday night, as TSLA shares shed nearly 11% since the EV giant company announced record first-quarter deliveries but fell short of Wall Street expectations.
The global electric-vehicle maker reduced Model S and X prices by $5,000, the third price reduction this year. The Model S starts at $84,990 while the Model X now begins at $94,990. Meanwhile, Tesla cut U.S. Model 3 prices by $1,000 to an entry price of $41,990. The Model Y was cut $2,000 to $49,990.
Tesla's decision to slash U.S. vehicle prices comes ahead of the implementation of new battery and mineral component requirements to qualify for the full Inflation Reduction Act $7,500 tax credit for EVs.
Earlier in the week, Tesla also cut Model 3 and Y prices in Australia once more. Tesla trimmed prices in China on Jan. 6, following big cuts in late October. The global EV maker also significantly reduced prices in the U.S. and Europe on Jan. 13. The company reduced European prices again in early March, with further U.S. discounts for the Model S and X.
Those price cuts and new U.S. EV credits lifted first-quarter deliveries to a record, but fell short of FactSet views. Production outpaced deliveries once again, with Model S and X output nearly twice as high as sales.
In the aftermath of the April 2 deliveries and production announcement, many analysts predicted further Tesla price cuts to support demand.
Tesla Stock
With the market closed Friday, investors won't get a chance to react to the latest Tesla price cut until Monday. However, Tesla stock tumbled 10.8% to 185.06 on the week following the Q1 delivery report.
TSLA shares plunged below a 200.76 cup-with-handle buy point and its 50-day moving average this week. Tesla stock had forged its base below the 200-day line, which tends to be a warning sign. TSLA appears to be working on a new handle, already present on a weekly chart, with a 207.89 buy point, according to MarketSmith analysis.
Tesla announces first-quarter financials on April 19, giving investors an idea how price cuts hit profit margins in 2023.
Meanwhile, Tesla's lowest-priced vehicle, the Model 3, is expected to have its $7,500 U.S. EV tax credit reduced on April 18.
The Biden administration announced on March 31 that vehicles eligible for the full $7,500 tax credit must have batteries with specific amounts of components from North America and critical minerals sourced in the U.S. or from certain countries.
Vehicles that meet one of the critical minerals or battery components requirements will be eligible for a $3,750 tax credit.
The battery criteria goes into effect April 18, when a list of models that qualify for the full $7,500 tax credit will be issued.
The Model 3 contains a battery from China. Tesla's Model 3 page on its website has a banner informing EV shoppers the "$7,500 tax credit is anticipated to be reduced for Model 3 on April 18. Take delivery now."
The average Tesla vehicle selling price in the first quarter was around $46,780, according to FactSet. That's down from $51,400 in the fourth quarter and $52,100 a year ago.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
