Tesla (NASDAQ:TSLA) has slashed prices for its vehicles in the U.S. after the EV giant missed its third-quarter delivery estimates. It would be reasonable to assume that CEO Elon Musk is aiming to spur demand for his cars with the low-price strategy once again.
The company has lowered prices for its Model 3 sedan and Model Y long-range vehicles in the range of 2.65% to 4.23%. Moreover, TSLA’s Model Y performance variant will cost $2,000 less to customers.
It is worth mentioning that earlier this week, Tesla introduced a more affordable rear-wheel-drive version of its Model Y in the U.S. market.
It is important to note that TSLA’s price-cutting strategy is not restricted to just the U.S. It recently launched a revamped Model Y car in China, but at the same base price as before. Also, the price of its two higher-end Model Y vehicles in the country was cut by 14,000 yuan ($1,900) in August. These moves point to Tesla’s efforts to remain competitive and stimulate demand in the Chinese market.
The automaker initiated an aggressive price war on a global scale in early 2023. With this move, Musk is prioritizing volume sales over gross margin performance. The company aims to sell 20 million EVs worldwide by 2030.
Is Tesla a Buy or Sell Right Now?
Tesla has an impressive lineup of new vehicles, including the much-awaited Cybertruck and the Tesla Semi, to be launched soon. Also, the company’s integration of artificial intelligence (AI) into its EVs positions it well to benefit from the global AI revolution. Finally, Tesla’s energy generation and storage business is poised for growth and could become a major revenue driver.
Nevertheless, growing EV competition and falling deliveries keep analysts cautiously optimistic about the stock. Tesla has a Moderate Buy consensus rating on TipRanks based on 12 Buys, 13 Holds, and four Sells. The average price target of $264.56 implies 1.7% upside. Shares have risen 140.6% year-to-date.
