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Tesla Model Y prices were bumped up this week.
Courtesy Tesla
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Tesla
(ticker: TSLA) raised prices for its Model Y crossover again, further reversing the trend of this year’s dramatic EV price cuts. It’s another signal to car buyers Tesla will keep prices stable. And it should help assuage investor concerns about demand, margins, and competition.
So far, investors like the move. Tesla stock was up 2.3% in premarket trading at $264.55, while
S&P 500
and
Nasdaq Composite
futures were up 0.2% and 0.1%, respectively. Closing higher Wednesday would be the 14th consecutive rise for shares.
The price of a Tesla Model Y, long-range trim, is $50,490, before the application of a $7,500 federal tax credit, according to the car maker’s website on Wednesday. That represents a bump of $250 this week, with the Model Y previously priced at $50,240, based on an archive of the Tesla site as of Monday.
The price of a long-range Model Y is down $16,000 from 2022 peaks, off roughly 25%. Prices across the rest of Tesla’s vehicle lineup have fallen as well this year, weighing on investor sentiment.
While investors and Wall Street have scrutinized pricing, CEO Elon Musk pointed out in April that other car companies adjust prices frequently. It isn’t as transparent to car buyers because of traditional dealer networks. Tesla is its own dealer network.
“Our finger on the pulse is real-time and does not have latency…other car companies have a lot of latency in their data,” said Musk on Tesla’s first-quarter earnings conference call, adding that Tesla adjusts price rapidly in response to order patterns.
Now the pricing trend has started to reverse. This week’s move on prices is another small increase, after similarly sized bumps to a few models last month. In addition to being a signal to buyers not to wait, it is also a sign to investors that demand might be improving.
Investors will get more tangible information about demand in a couple of weeks when the EV maker releases second-quarter delivery numbers. Wall Street expects about 445,000 units—a record, and up from about 423,000 delivered in the first quarter. Estimates have come down a few thousand units over the past couple of months.
Beating estimates will be important for the stock, which has gained more than 25% so far in June and is up about 110% so far this year.
Write to Al Root at [email protected] and Jack Denton at [email protected]
Source: https://www.barrons.com/articles/tesla-stock-winning-streak-ev-prices-model-y-elon-musk-fc2d10df?siteid=yhoof2&yptr=yahoo