Tesla’s website revealed on Thursday that the Electric Vehicles giant has reduced prices on its vehicles in the United States by between 2% and nearly 6% which makes it the fifth reduction in 2023.
According to Reuters, the electric vehicle giant has been cutting prices in its largest market since the beginning of this year.
Meanwhile, some analysts are worried that this price reduction strategy may harm the company’s profitability.
The price cuts come as the United States prepares to implement more stringent standards that will limit tax credits for electric vehicles.
The discounts are applicable to both versions of Tesla’s Model 3 sedan, with a price reduction of $1,000, and its Model Y crossover, which sees a $2,000 reduction.
The prices for both versions of the more expensive Model S and Model X have also been reduced by $5,000.
Tesla has previously mentioned that the stricter US standards would lower the $7,500 tax credit that has been available for its base, rear-wheel drive Model 3 since January.
Some analysts had predicted that further price cuts could put Tesla’s industry-leading profit margins at risk.
The leading electric vehicle company has already implemented price cuts in the US, China, and other markets in an attempt to boost demand.
Despite this, the company only reported a 4% increase in Q1 deliveries compared to the previous quarter.
Tesla has set a delivery target of 1.8 million for this year, and it has already reduced the price of its base Model 3 by a total of 11% since the beginning of this year.
Additionally, its base Model Y has seen a 20% reduction in price.
