Tesla Inc has reduced pricing for certain of its Model Y and Model 3 vehicles in the United States, the sixth time this year as the firm seeks to boost demand even at the expense of its industry-leading profit margins.
The layoffs come before of the company’s first-quarter results report, which is scheduled on Wednesday, and drove the stock down 2.5% in premarket trade. After experiencing their largest yearly decrease in 2022, shares have gained just about 50% this year.
Tesla’s website showed late on Tuesday that it cut prices of its Model Y ‘long range’ and ‘performance’ vehicles by $3000 each and of its Model 3 ‘rear-wheel drive’ by $2,000 to $39,990.
The company cut U.S. prices of its base Model 3 by 11% so far this year and that of its base Model Y by 20% – moves that come as the United States, its largest market, prepares to introduce tougher standards that will limit EV tax credits.
It also recently lowered prices in Europe, Israel and Singapore, as well as in Japan, Australia and South Korea, expanding a discount drive it started in China in January.
Still, Tesla reported a sequential rise of just 4% in its first-quarter deliveries, much less than the 17.8% sequential climb in the prior quarter.
For the first quarter, Wall Street expects the company’s auto gross margin to hit a more than three-year low of 23.2%, according to 17 analysts polled by Visible Alpha.
Its revenue is expected to rise 24.2% year-on-year to $23.29 billion, but analysts’ average profit estimate has fallen by about 2.4% in the last three months, according to Refinitiv data.