Article on Reuters reported that Tesla has increased the prices of its Model S and X premium electric vehicles in the U.S. Despite the increase, the prices are still 20% lower than the beginning of the year, after a series of price reductions were implemented to boost demand. The prices of the Model S Plaid and Model X Plaid, the performance versions of these models, have been increased to $107,490 from $104,990, while the price of the Model X is approximately 2.6% higher at $97,490, and the Model S has been raised around 2.9% to $87,490. However, all four models are still between 16% and 23% cheaper than at the beginning of the year. Tesla cut prices of both versions of Model S and Model X by $5,000 earlier this month after reporting a 38% drop in deliveries of these vehicles from January to March. Tesla CEO, Elon Musk, confirmed that the company will prioritize sales growth over profit in a weak economy, doubling down on the price war he began at the end of last year. Tesla's gross margin in the last quarter was its lowest in two years, missing market estimates as it slashed prices aggressively in markets including the U.S. and China to boost demand and counter rising competition.
This decision, at least in my opinion, sends mixed signals. But on the other hand, I am used to it that Elon is always thinking about how to break the headlines. Which can be good, but at the same time also bad thing for the company.
Nevertheless, company has proven history, they have great plans, and Elon is a man that does not like to lose – better said, he does not. One more important note to myself is that Tesla had a stock split, meaning that the prices are growing nicely. * At least for now. I decided, without technical analysis, to buy stocks of Tesla when the market opens.
Movement of Tesla in the last five years. (Source: Investing) *
* Past performance is no guarantee of future results.