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Tesla (TSLA) Slashes Prices of Model 3 & Model Y in the US

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Tesla (TSLA - Free Report) slashed the price of its Model 3 sedan and Model Y crossover yet again in the United States in a bid to boost sales.

Per the company’s website, Model 3 Rear-Wheel Drive (RWD) now starts at $38,990, down from the previous price of $40,240, while Model 3 Long Range is now priced at $45,990, down from $47,240.

Tesla’s Model 3 Performance now starts at $50,990, down from the previous price of $53,240. The new price is quite appealing for a model that has a top speed of 162 mph and a range of 315 miles per charge.

For Model Y, Tesla slashed prices of the all-electric crossover’s mid-tier and top-tier variants. The Model Y Long Range and Model Y Performance now start at $48,490 and $52,490, respectively, down from $50,490 and $54,490, respectively.

The automaker retained the price of Model Y RWD at $43,990.

This fresh round of price cuts has made the models more attractive in the U.S. market. Under the Inflation Reduction Act, both models qualify for the $7,500 federal tax credit. Other incentives could further reduce the prices of the models in states like Colorado.  

On the other hand, the EV pioneer increased the price of Model Y in Sweden and Norway. In Sweden, the company increased the price by $1,364, while in Norway it increased the price in the range of $1,822-$2,186.  

This year, Tesla adjusted the prices of its models quite a few times to stimulate demand. By the end of the year, Tesla will start delivering Cybertruck and Model 3+. A new line-up might help the company reach its delivery target of 1.8 million units in 2023.

Notably, in September, Tesla sold 74,073 vehicles manufactured in Giga Shanghai. The figure represents a decline from 83,135 vehicles sold in the year-ago period and 84,159 vehicles sold in August.

Despite registering a decline in the number of vehicles sold in September, Tesla delivered robust sales in the third quarter. The company sold 222,517 China-manufactured vehicles, up 18.16% year-over-year. It sold 699,056 vehicles in the first three quarters of 2023, up 44.71% year-over-year.

Zacks Rank & Key Picks

TSLA currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the auto space are Li Auto (LI - Free Report) , Ford Motor Company (F - Free Report) and Allison Transmission Holdings, Inc. (ALSN - Free Report) . LI and F currently sport a Zacks Rank #1 (Strong Buy), and ALSN carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for LI’s 2023 sales and earnings implies year-over-year growth of 154.7% and 9,100%, respectively.

The Zacks Consensus Estimate for F’s 2023 sales and earnings indicates year-over-year rises of 7.5% and 12.2%, respectively. The EPS estimates for 2023 and 2024 have moved up by 6 cents and 8 cents, respectively, in the past 60 days.

The Zacks Consensus Estimate for ALSN’s 2023 sales and earnings implies year-over-year growth of 9.3% and 26.4%, respectively. The EPS estimates for 2023 and 2024 have moved north by 12 cents and 19 cents, respectively, in the past seven days.

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