Tesla Slashes Prices Again

Tesla has reduced the prices of its entire electric vehicle lineup in the United States for the third time this year, apparently to attract more buyers amidst rising interest rates. The largest price cuts, which were up to $5,000 per vehicle, were made on the company's more expensive models, the S large sedan and the X big SUV, both of which have been slow sellers. The Y small SUV, the company's most popular model, saw a $2,000 price cut, and a lower-cost dual-motor version was added, priced at $49,990. The 3 small sedans received a $1,000 price cut.

While Tesla's first-quarter sales grew 36%, they fell short of analysts' expectations. According to FactSet, the company delivered 422,875 vehicles globally from January to March, just below analyst estimates of 432,000 for the quarter. Analysts have speculated that the price cuts were made to take advantage of Tesla's larger profit margin per vehicle than most automakers and to increase market share, which could pressure startups and legacy automakers that are now rolling out EVs.

The price cuts could also be an indication of slowing demand for Tesla, and the company may need to sell more vehicles to keep its factories running at full capacity and protect its high profit margins. The new prices are expected to help Tesla's affordability, a key factor that has limited demand for the company's products, according to Elon Musk, Tesla's CEO.

The company plans to release its first-quarter earnings on April 19.