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Tesla (NASDAQ:TSLA) reduced prices for its Model Y rear-wheel drive and Model Y Long Range by $1,000 to $42,990 and $47,990 respectively, representing a discount of 2.3% and 2% from previous prices.
Prices of the Model Y Performance variant and other models remained unchanged, according to the website.
New Model Y rear-wheel drive and Long Range model prices will be reduced for deliveries now through Feb. 29, Tesla said in a notice on its website, adding that that price would increase by $1,000 or more on March 1.
Tesla slashed prices of its Model Y cars in Germany last month, after most of its car production at its Berlin factory was suspended due to a lack of components after attacks in the Red Sea caused shipping disruptions.
In January, Tesla also warned of “notably lower” sales growth this year as it focuses on the production of its next-generation electric vehicle, code-named “Redwood (NYSE:RWT).” The latest price cuts are expected to further weigh on Tesla’ margins, already hurt by a price war that started more than a year ago.
The latest price cuts come as Tesla is bracing for cooling demand and rising competition with a growing number of inexpensive EVs, such as those made by China’s BYD (SZ:002594), which overtook Tesla as the world’s top EV maker in the final quarter of 2023.
In another sign of cooling EV demand, rental firm Hertz Global Holdings (OTC:HTZGQ) in January said it was selling about 20,000 electric vehicles, including Teslas, from its U.S. fleet and opting for gas-powered vehicles due to higher expenses related to collision and damage for EVs.
Tesla shares are down 22.1% so far this year.
