Tesla is slashing prices on its best-selling models in the United States to clear out its largest inventory ever, Bloomberg reported.
Tesla is cutting prices on its Model Y inventory, with the rear-wheel drive version dropping by $4,600 to $41,390, or just $33,890 after factoring in the U.S. electric vehicle tax credit; the long-range and high-performance versions have discounts of at least $5,000.
A Tesla store in California, USA.
Before the price cuts, Tesla produced 46,561 more vehicles than it delivered in the first quarter, leaving more vehicles on inventory than ever before. Tesla said at the time: "The decline was partly due to the early stages of Model 3 refresh production at Tesla's Fremont factory, shipping delays caused by the Red Sea situation and the temporary shutdown of Tesla's Berlin factory due to an arson attack."
However, some analysts are not buying it.
The discrepancy between Tesla’s first-quarter production and sales “debunks the view that deliveries are somehow supply-constrained rather than demand-constrained,” JPMorgan Chase & Co. analyst Ryan Brinkman wrote in an April 3 report.
Based on this, Brinkman cut his price target for Tesla from $130 to $115 and cut his first-quarter revenue and earnings per share estimates. He now expects Tesla to report a free cash outflow of $1.3 billion instead of an inflow of more than $300 million due to an expected record build in finished goods inventory.
Tesla's stock price has fallen 31% so far this year, ranking second in the S&P 500.
