(BFM Bourse) – The electric vehicle specialist has decided to lower prices in the United States but also in Europe. Its price has fallen just like that of European manufacturers.
Tesla triggers a butterfly effect on the stock market. In agony on Wall Street last year (in one year the value fell by 64%), the automaker specializing in electric vehicles is trying to raise the bar, after several quarters of disappointing business results.
In the last quarter the group had, for example, delivered “only” 406,000 vehicles against the more than 420,000 units forecast by analysts. Overall for the year the company has recorded a growth in deliveries of “only” 40%, while the group is aiming for a figure of 50% per annum. After this disappointment, announced last week, the group has decided to lower its prices in the United States, with reductions ranging between 6% for the Model 3 and 20% for the Model Y, reports Bloomberg. These decisions are not limited to the uncle’s country Satand also concern Germany, the United Kingdom and France.
In France, the Model 3 is back under 40,000 euros and the Model Y under 47,000 euros, explain colleagues from BFM-Auto. The group had already cut prices in China a few months ago.
A risky calculation
With the increase in its production capacities – the American media indicated in particular this week that the group intends to spend 770 million dollars to expand the plant in Austin, Texas – the group is therefore clearly aiming for volumes, even at the cost of cut the unit margin .
“There will be a significant impact on Tesla’s gross margin in the near term and the calculation depends on how long these new price levels last,” Evercore ISI analyst Chris McNally wrote as quoted by Bloomberg. “Even if the cuts apply for only part of the year and Tesla partially reverses them, 2023 earnings per share could be 30% to 40% below the current consensus,” he said. .
Tesla stock takes another warning shot after this decision. In pre-opening trading on Wall Street, it fell 6.1%.
Price power at risk
But beyond the manufacturer led by Elon Musk, the entire automotive sector is faltering. On Wall Street, still in pre-open, Ford lost 3.3% and General Motors lost 3.6% at around 2:30 p.m.
Last year automakers were able to restore their operating margins thanks to significant price increases, thus exploiting their “pricing power”. But Tesla’s price drop could spell the end of hopes for robust price effects this year.
“Tesla gets to put pressure on everyone. When you have a competitor who cuts prices looking for volume, it puts the competitors in an awkward position, when they were hoping for a ‘price’ [un environnement de prix] favorable on electric vehicles,” considers a financial analyst.
Julien Marion – ©2023 BFM Exchange