| 11:51 AM EST

Tesla Cuts Price of Model Y by $3,000

EV maker slashed prices of other models in late May.
#Tesla #Toyota

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Less than four months after launching its Model Y crossover, Tesla has cut the price of the new vehicle by as much as $3,000.

                                                              Tesla Model Y 

Tesla has offered two versions of the Model Y since launching the electric vehicle in mid-March. The starting price of the long-range dual-motor all-wheel-drive variant has been reduced by $3,000 to $51,200. The Performance version of the crossover was trimmed by $1,000 and now stickers for just under $60,000.

A cheaper version of the Model Y is due later.

New Model, Same Strategy

Tesla slashed the prices of its three other EVs in late May. This included $5,000 haircuts for the high-end Model S sedan and Model X crossover and a $2,000 reduction for the Model 3 car.

The discounts are interesting, considering Tesla was one of the industry’s few sales bright spots in the second quarter. The carmaker delivered nearly 90,700 vehicles during the period, beating analysts’ forecasts by about 25%.

Tesla doesn’t break out sales by individual models, but it said the Model 3 and Y combined to account for 88% of the Q2 volume. The company claims the Y already is profitable, something it hasn’t achieved this quickly with any of its other models.

Why?

Tesla hasn’t said what prompted the lower prices.

But the company has taken similar approaches before. It also lowered the prices of its other vehicles shortly after they were launched and the backlog of initial orders were filled.

In this case, Tesla may be trying to keep demand high for all its vehicles as industry sales struggle to get back to their pre-pandemic levels.

The company also could be compensating for recent quality issues. The Model Y has been plagued by problems since its launch, and overall brand would have finished last in this year’s J.D. Power Initial Quality Study if the carmaker had agreed to participate in the annual customer survey, according to the data marketing company.

Bottom Line

Tesla enthusiasts shrug off the quality glitches as typical startup issues.

Wall Street agrees. Tesla’s stock closed at $1,544 on Friday. It started the year at $430. Last month, Tesla passed Toyota to become the world’s most valuable carmaker in terms of market capitalization.

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