Tesla Inc. cut prices for some of its Model Y and Model 3 vehicles in the United States for the sixth time this year to juice demand as competition among electric-vehicle makers heats up around the world.
The cuts came ahead of Tesla’s first-quarter earnings. Tesla on Wednesday posted its lowest quarterly gross margin in two years, missing market estimates.
The company reported total gross margin of 19.3 percent, short of market expectations of 22.4 percent, according to 14 analysts polled by Refinitiv.
Tesla has slashed prices in numerous markets worldwide to stay ahead of legacy U.S. competitors such as Ford Motor, while it strives to catch up with Chinese automakers such as BYD Co. Ltd. in its second-largest market.
The company’s website showed late on Tuesday that it cut prices of its Model Y “long range” and “performance” vehicles by $3,000 each and of its Model 3 “rear-wheel drive” by $2,000 to $39,990.
Tesla cut U.S. prices of its base Model 3 by 11 percent so far this year and that of its base Model Y by 20 percent, moves that come as the United States, its largest market, prepares to introduce tougher standards that will limit EV tax credits.
It also recently lowered prices in Europe, Israel, and Singapore, as well as in Japan, Australia, and South Korea, expanding a discount drive it started in China in January.
Tesla has been able to stay ahead of large U.S. and Japanese automakers that are making inroads in EVs by cutting sticker prices, but Chinese automakers are starting to take the lead in that market and others with even lower-cost offerings.
However, Tesla’s quarter-over-quarter rise of 4 percent for first-quarter deliveries was much less than the 17.8 percent sequential climb in the prior quarter.
