Tesla cuts prices

Tesla cuts prices

Tesla model 3 and Tesla model Y

(Bloomberg) — Tesla Inc. cut prices on its top-selling models in the US again, days after its third-quarter deliveries missed estimates.

The carmaker marked down the starting price of the base Model 3 by $1,250 to $38,990, and discounted the long-range version of the sedan by the same amount to $45,990.

Tesla also shaved $2,250 off the price of the performance version of the Model 3, which now starts at $50,990, and $2,000 off the long-range and performance versions of the Model Y sport utility vehicle, which now cost $48,490 and $52,490, respectively. The company reintroduced a cheaper version of the Model Y earlier this week.

Tesla shares dropped 1.6% as of 5 a.m. New York time Friday, before the start of regular trading. The stock has more than doubled this year.

Tesla delivered 435,059 vehicles during the last three months, down from the previous quarter and around 20,000 units short of what analysts were expecting. The company will need to deliver over 475,000 more cars to meet its 1.8 million target for the year.

While Tesla’s price cuts have helped stoke demand amid higher interest rates and inflation, they’ve also put a damper on the automaker’s profit margins.

Chief Executive Officer Elon Musk has downplayed the trend, saying the company could sacrifice upfront earnings on each car sold and make money after the point of purchase on software updates. His years of predictions that Tesla will deliver autonomous-driving capabilities this way haven’t panned out.

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