For the fourth time in just over a month, electric vehicle giant Tesla has again adjusted the pricing of its cars in the United States.
In February 2023, Tesla implemented drastic cuts across its EV lineup, with Model Y seeing the biggest cut of up to USD 13,000. However, in the latest adjustment round, the price tag of the same model has gone up by USD 500.
Tesla CEO Elon Musk has already indicated more such price increases as the carmaker is trying to adjust to the massive demand. The company has reportedly decreased the price of its base Model 3 by USD 500 again and the vehicle buying cost is now starting at USD 42,990. Tesla is reportedly still not letting people order or giving a price on the Model 3 Long Range.
Tesla is also likely to update the Model 3 variant. The Model Y Long Range, which is the base version for new orders, is still having the same starting price of USD 54,990.
While the Model Y Long Range is the base trim available to order, buyers can still get the Model Y Standard Range AWD. However, Tesla has increased the price of that version by USD 500, thus revising the starting price to USD 51,490.
These price revisions come amid Tesla listing a quick delivery timeline by the end of 2023 March for a new Model Y Performance.
Tesla’s shares extended their breakneck rally in February 2023 to double from the lows touched in early January, helped by a rising appetite for growth and technology stocks, and signs showing that the demand for its electric vehicles is rebounding.
The shares closed up 3% at USD 207.32 in New York, capping a 104% gain from their January 6 intraday trough. The shares are bouncing off a 65% plunge in 2022.
As per a Bloomberg report, riskier growth stocks, which were beaten down hard in 2022 amid concerns about rising interest rates and a recession, have made a strong comeback in 2023 as optimism about the economy has returned and investors bet the US Federal Reserve’s aggressive rate-hike cycle is nearing its end.
At the same time, Tesla’s own earnings in January 2023, and a spate of positive headlines on tax credits for electric vehicles, have provided a further lift to the shares of the company.
“Tesla is rising so fast because of a market that believes the Fed is coming to the rescue. Good fourth-quarter results and price cuts to turbocharge demand also helped,” Patriarch Organization CEO Eric Schiffer said.
Early in February 2023, the Joe Biden administration mentioned expanding the newly-revamped electric vehicle tax credit to allow SUVs costing up to USD 80,000 to receive those credits.
However, the EV maker faces a worry as analysts of GLJ Research see a potential “Valentine’s Day Massacre” for the Tesla stocks, after weak China deliveries during the period of February 6 to 12, suggesting the price cuts in the world’s second-largest economy are not working.
The analysts also highlighted that Tesla sold just 6.963k cars in China during Valentine’s week. The figure, as per the GLJ Research, is just a fraction of the roughly 17.734K adjusted cars/week Tesla produced in Shanghai in January 2023, or just 39%, reported Investing.com.
“Stated more clearly, should TSLA’s 1Q23 domestic China sales come in below and/or around 100K, as the data currently suggests it will, we believe the stock would come under acute selling pressure,” the researchers commented.