Tesla cuts Model 3 and Model Y prices in the U.S. after car deliveries fall

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A Tesla dealership in Colma, California, U.S., on Wednesday, Jan. 26, 2022.
David Paul Morris | Bloomberg | Getty Images

Tesla cut the price of some Model 3 and Model Y versions in the U.S. after the company reported third-quarter deliveries that missed market expectations.

The starting price for the Model 3 is listed at $38,990 on Tesla’s website, down from $40,240 previously. The long range Model 3 fell from $47,240 to $45,990. And the Model 3 Performance fell to $50,990 from $53,240.

Tesla’s Model Y Performance sports utility vehicle now starts at $52,490, down from a previous price of $54,490.

Beginning at the end of last year, Tesla began cutting the prices of its cars across the world in a bid to stoke demand amid concerns over slowing consumer spending in markets like the U.S. and China and as competition in the electric vehicle space ramped up.

Tesla regularly tinkers with the price of its cars, especially in its biggest markets of the U.S. and China.

But the latest round of price cuts comes just days after Tesla reported third-quarter deliveries of 435,059 vehicles, missing analyst expectations and marking a decline from the previous quarter.

Tesla put the fall down to factory upgrades which caused manufacturing sites to have downtime.

Elon Musk, CEO of Tesla, has made no secret of the carmaker’s desire to chase higher volume over bigger margins this year.

So far, that has paid dividends for the stock with shares up over 100% this year.

Tesla is still looking to deliver 1.8 million vehicles this year.

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