Tesla Cuts Model Y, S, X Prices In U.S., China As Earnings Loom

On Apr 20, 2024

Tesla (TSLA) cut the U.S. price of the Model Y, Model S and Model X by $2,000 on Saturday, followed by similar cuts in China. They are the latest in a series of pricing moves by the EV giant.

Meanwhile, Tesla CEO Elon Musk postponed a trip to India.

Tesla Cuts U.S. Prices

The Model Y now starts at $42,990 before incentives and excluding taxes and fees. The Model S entry price is $72,990 while the Model X starts at $79,990. The Model Y and Model X are eligible for IRA credits of $7,500.

Tesla Cybertruck and Model 3 prices were left unchanged, with production of both EVs still low.

The Model Y list price is now back to its lowest ever. For much of February, Tesla offered a temporary discount of $1,000, bringing the price to $42,990. After the discount ended, Tesla said that prices would rise by additional $1,000 on April 1, which did happen.

However, in the past week Tesla largely eliminated Model Y inventory discounts, which reached 10% off the list price in some cases. There are still some slight discounts on demo cars.

So, effectively, Tesla Model Y prices are still substantially higher than they were just a few days ago.

The EV giant appears to be trying to shore up sliding profit margins, at least in the U.S. But that could take a big toll on demand, which is already struggling. Tesla deliveries plunged to just 369,783 worldwide in Q1, far below the most bearish estimates, even with big inventory discounts and the promise of April 1 price hikes.

Tesla China Prices Cut

Tesla cut China prices across the board by 14,000 yuan ($1,972) on Sunday local time.

The entry Model Y price is now 249,900 yuan ($35,194), down from 263,900 yuan.

The base Model 3 is 231,900 yuan ($32,659).

The Model S in China now starts at 684,900 yuan ($96,457) and the Model X at 724,900 yuan ($102,090). The Model S and X are imported from the U.S.

On April 1, Tesla China had hiked the Model Y price by 5,000. That also came as several incentives expired. But a few days later, Tesla China began offering 0% interest loans on its EVs. That arguably more than offset the lost incentives as well as the short-lived 5,000 yuan increase for the Model Y.

Tesla faces extreme pressure in the China market, where rivals are rolling out new and refreshed models with advanced features and lower prices.

Tesla Plunges With One Big Question For The Earnings Call

Elon Musk’s Passage To India Delayed

Musk postponed a Sunday-Monday trip to India, which was going to include a meeting with Indian PM Narendra Modi. “Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year,” Musk said on his social site X on Saturday.

That delays comes amid fresh reports that Musk was going to announce plans for a Tesla factory in India. An India plant would let Tesla bypass hefty auto tariffs. But without a cheap EV, it’s unclear how much demand there be in India, which has limited charging infrastructure.

Tesla Strategy In Focus

Last week Tesla announced plans to lay off more than 10% of its global workforce. Along with curbing inventory discounts, that suggests Tesla will cut production even further as sales falter.

All this comes ahead of Tesla earnings on Tuesday evening, with the conference call in focus. Investors will want to know what is Tesla’s strategy for reviving growth. Most of all, will Musk confirm that Tesla is shelving a low-cost EV for years to come, prioritizing development of a robotaxi?