Tesla (TSLA) on Friday put in place additional vehicle price cuts in Europe, Israel and Singapore, continuing its 2023 price-slashing strategy ahead of its first-quarter financials release next week. TSLA shares edged lower Friday.
XTesla on Friday reduced prices in several European markets, including Germany and France, for all versions of the Model 3, S and X, as well as the Model Y Performance. In early March, Tesla had offered significant discounts in Europe, but not official price cuts.
In Germany, Tesla lowered the price of its Model 3 and Model Y vehicles by between 4.5% and 9.8%, while it cut prices of the Model 3 and Model Y vehicles in Singapore between 4.3% and 5%. Tesla also cut prices in Israel, with the price of the base rear-wheel drive Model 3 reduced by 25%, according to Reuters.
This follows Tesla's decision last week to cut U.S. prices on all its EVs. It also reduced prices in Australia.
Meanwhile, Tesla will not attend next week's Shanghai Auto Show, even as its top China competitors plan to roll out new EVs.
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Tesla stock dropped 0.5% to 184.99 Friday during market trade. TSLA is down around 10.8% so far in April, after shares on Thursday rebounded 3%. Tesla stock has formed a cup-with-handle base with a 207.89 buy point, according to MarketSmith analysis.
However, that entry is just below the 200-day moving average, which tends to be a warning sign.
Tesla Stock: Price Cuts Put Gross Margins In Focus
Last week, the global electric-vehicle maker reduced Model S and X prices by $5,000 in U.S., the third price reduction this year. The Model S starts at $84,990 while the Model X now begins at $94,990. Meanwhile, Tesla cut U.S. Model 3 prices by $1,000 to an entry price of $41,990. The Model Y was cut $2,000 to $49,990.
Earlier in the week, Tesla once more cut Model 3 and Y prices in Australia. Tesla trimmed prices in China on Jan. 6, following big cuts in late October. The global EV maker also significantly reduced prices in the U.S. and Europe on Jan. 13, then reduced European prices again in early March.
Those price cuts and new U.S. EV credits lifted first-quarter deliveries to a record, but fell short of FactSet views. Production outpaced deliveries once again, with Model S and X output nearly twice as high as sales.
Tesla reports first-quarter financials Wednesday with gross margins expected to be in focus. Analysts predict earnings falling 19% to 86 cents per share with revenue growing 27% to $23.78 billion in Q1.
Wall Street forecasts gross margins around 21% in the current quarter. A year ago, Tesla's gross margins were about 29% while in the fourth-quarter of 2022 gross margins were 24.3% for the EV giant.
The average Tesla vehicle selling price in the first quarter is around $47,250, according to FactSet estimates. That's down from $51,400 in the fourth quarter and $52,100 a year ago.
What's Up With The U.S. Tax Credits?
TSLA's recent U.S. vehicle price cuts are ahead of the implementation of new battery and mineral component requirements to qualify for the full Inflation Reduction Act $7,500 tax credit for EVs.
The Biden administration announced on March 31 that vehicles eligible for the full $7,500 tax credit must have batteries with specific amounts of components from North America and critical minerals sourced in the U.S. or from certain countries.
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Vehicles that meet one of the critical minerals or battery components requirements will be eligible for a $3,750 tax credit.
The battery criteria goes into effect April 18, when a list of models that qualify for the full $7,500 tax credit will be issued.
The Tesla Model 3 contains a battery from China. Tesla's Model 3 page on its website has a banner informing EV shoppers the "$7,500 tax credit will be reduced to $3,750 for Model 3 Rear-Wheel Drive on April 18."
Tesla stock sits third in IBD's Auto Manufacturers industry group. TSLA has an 84 Composite Rating out of 99. Tesla stock has an 69 Relative Strength Rating. The EPS Rating is 99 out of 99.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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