Wedbush analyst Dan Ives argues that lowering prices was the correct strategic move as demand may be waning and competition is heating up.
in several European countries, Tesla cut prices for those models in a big way in the U.S., likely in the name of boosting demand and to bring these cars under the price caps for the Inflation Reduction Act’s EV tax credit.In a note to clients today, Ives argued that lowering prices was the correct strategic move as demand may be waning and competition is heating up.
For the popular Model Y SUV, even bigger price cuts have arrived. The Model Y Long Range goes from $65,990 to $52,990, a nearly 20% drop. The Model Y Performance goes from $69,900 to $56,990, an almost a 19% drop. Note that the Model Y in 5 seat configuration has the same $55,000 price cap.The 7 seat version of the Model Y, which had qualified for the $80,000 price cap on EVs, now rises in price by $1,000.
An even bigger concern is margin compression. Cutting prices from 6% all the way to nearly 20% is cutting deep into Tesla’s profit margins, which prior to these cuts was the envy of the automotive world .
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