Tesla: price cut on eve of quarterly results

(CercleFinance.com) - Tesla shares fell for their seventh consecutive session in a run in New York Stock on Monday, after announcing a new price cut for its electric vehicles.


The shares finished down3.4%, while the S&P 500 index rose almost 1% at the same time.

The US car maker, which is due to publish its Q1 results this evening, has lowered its prices by up to 4% in the US.

In Europe, cuts are up to 5%, while in China they can be as much as 6%, analysts say.

At the same time, the purchase price of the 'Full Self Driving (FSD)' feature has been reduced from $12,000 to $8,000, while the price of a subscription to the service has been cut to $99 per month, from $199 previously.

These measures come after Tesla had already cut its prices by between 9% and 10% since the start of the year, but HSBC's teams point out that more affordable Tesla cars do not necessarily translate into higher sales.

Price volatility has, on the other hand, affected the appetite shown by professional fleet operators such as leasing and car rental specialists, the broker points out.

Sixt and Hertz have decided to reduce their Tesla fleets, in particular because of the uncertainty surrounding their resale prices.

Tesla shares have fallen by over 40% since the start of the year, against a backdrop of lower demand for electric vehicles and rising inventories.

These elements are now well known and seem to be integrated into the share price", emphasize BofA analysts, who maintain their "neutral" opinion on the stock, with a price target of $220.

The research firm warns that Elon Musk's group could, on the occasion of its quarterly publication tomorrow evening, emphasize its next growth drivers, namely the 'Robotaxi' project due to be unveiled on August 8, and the prospect of launching an entry-level vehicle, the 'Model 2' in 2025/2026.


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