Tesla cuts U.S. prices again ahead of 1Q earnings release

Detroit – Tesla dropped the starting prices for its two top-selling models overnight, the company’s fourth price cut in the U.S. this year.

The company lopped $3,000, or about 6%, off the starting prices for all three versions of the Model Y small SUV, Tesla’s top-seller. It also cut $2,000, or about 5%, from the starting price of a version of the Model 3 small sedan.

Tesla could have cut the Model 3 prices to make more cars loaded with options eligible for the U.S. government’s $7,500 electric vehicle tax credit. With options, some Model 3s would exceed the government’s $55,000 price limit for cars to be eligible for the credit.

But some industry analysts say demand may be slowing for the company’s vehicles as more competition enters the market. Others say Tesla is using its high profit margins to take market share from competitors.

Before the opening bell Wednesday, shares of Tesla Inc. slid more than 3%. After major declines last year, the company’s stock is bouncing back, up almost 50% so far in 2023.

A message was left Wednesday morning seeking comment from Austin, Texas-based Tesla.

The cuts follow price drops earlier this week overseas, with analysts reporting cuts in Europe, Israel and Singapore.

They come just ahead of Tesla’s first-quarter earnings release scheduled for after the closing bell on Wednesday.

The $3,000 price cuts on the Model Y dropped the lowest-priced Dual Motor model to $46,990. The Long Range model went to $49,990 and the Y Performance dropped to $53,990. All versions of the Model Y were already eligible for the U.S. tax credit because the price limit for SUVs is $80,000.