Tesla has lowered the price of its Model 3 and Model Y in an effort to spur end-of-the-year demand and meet fourth-quarter delivery expectations.
After missing its third-quarter delivery expectations, Tesla must now deliver a record 476,000 electric vehicles (EVs) before the end of 2023 to ensure it meets its full-year target of 1.8 million vehicles, Reuters reported.
Tesla’s website now lists the starting price for the Model 3 at $38,990, down $1,250 from the previous price of $40,240. Meanwhile, the starting price of Tesla’s Model Y variant now costs $48,490, marking a roughly $2,000 price drop from the previously listed price — prior to factoring in tax incentives and savings.
Telsa’s price cuts come days after the company missed market estimates on its third-quarter deliveries, which fell 7% short of the previous quarter. Analyst estimates placed quarterly deliveries at 459,949 vehicles, with 442,000 at the low end and 511,405 at the high end, according to TechCrunch.
Delivery results for the 3-month period ending in October are estimated to be around 430,488 vehicles, a sharp drop compared to the 479,700 vehicles delivered in the previous quarter.
“A sequential decline in volumes was caused by planned downtimes for factory upgrades, as discussed on the most recent earnings call,” Tesla said in an October 2 press release.
“While Tesla remains a dominant force in the U.S. EV market for 2023, there is an increasing demand for a wider range of EV options to satisfy the growing consumer interest in electric vehicles,” said Ashwin Amberkar, an analyst at Canalys Research, per Reuters.
If Tesla wants to meet its year-end target of 1.8 million vehicles and maintain its market lead over legacy automakers, Thomas Martin, senior portfolio manager at Globalt Investments, said the EV maker could cut prices further.
“They are going to keep the pressure up on their competitors,” he said, Reuters reported.
Tesla is scheduled to report its third-quarter earnings on October 18.
