The largest of the cuts Friday on Tesla’s website were $5,000 per vehicle for the S large sedan and the X big SUV.
Guidehouse Research e-Mobility Analyst Sam Abuelsamid said the cuts are a sign of slowing demand for Tesla. The company, he said, needs to sell more vehicles to keep its factories running at full capacity to protect high-profit margins. “Overhead of underutilized plant eats up margin extremely quickly,” he said.
Other analysts have speculated that Tesla was cutting prices to take advantage of its profit margin per vehicle, which is larger than most automakers. The move could increase market share and put pressure on startups and legacy automakers now rolling out EVs. The biggest of Friday’s cuts came on Tesla’s aging S and X, which saw sales drop 38% from January through March. The Model S two-motor price dropped 5.6% to $84,990, while the S tri-motor Plaid was trimmed 4% to $104,990. The company cut 5% from the X two-motor price, to $94,990, while the X Plaid saw a 4.6% drop to $104,990.
The Model 3 rear-wheel-drive saw a 2.3% price cut to $41,990, with the 3 Performance version falling 1.9% to $52,990.Tesla cut prices in early March on the S and X, by $5,000 to as much as $10,000. In January it slashed the sticker numbers on several versions of its EVs, making some eligible for a U.S. $7,500 federal tax credit. Some versions Model Y saw price trims of nearly 20%, and the base price of the Model 3 small car was dropped by 6%.
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