Tesla Inc. : Price drop on the eve of quarterly results

(CercleFinance.com) – Tesla is posting a seventh consecutive session of decline on Monday on the New York Stock Exchange after announcing a further drop in the price of its electric vehicles.

One hour after Wall Street opened, the stock fell 3.8%, while the S&P 500 index advanced 0.2% at the same time.

The American manufacturer, which is due to publish its first quarter results tomorrow evening, has reduced its prices in the United States by up to 4%.

In Europe, price reductions go up to 5% while they can amount to almost 6% in China, according to analysts.

At the same time, the acquisition of the fully autonomous driving functionality known as ‘Full Self Driving (FSD)’ was reduced from 12,000 to 8,000 dollars, while the price of the subscription to the service was reduced to 99 dollars per month, compared to 199 dollars previously.

These measures come after Tesla had already reduced its prices by between 9% and 10% since the start of the year, but the HSBC teams point out that more affordable Teslas do not necessarily translate into an increase in sales.

‘Price volatility has, on the other hand, affected the appetite displayed by professional fleet operators such as car leasing and rental specialists’, underlines the broker.

‘Sixt and Hertz have also chosen to reduce their Tesla fleets, in particular because of the uncertainty surrounding their occasional resale prices,’ he adds.

Tesla shares have fallen more than 40% since the start of the year, amid lower demand for electric vehicles and a rise in stocks.

‘These elements are now well known and seem to be integrated into the stock price’, underline BofA analysts, who maintain their ‘neutral’ opinion on the stock, with a price target of 220 dollars.

The design office warns that Elon Musk’s group could, during its quarterly publication tomorrow evening, focus on its next growth drivers, namely the ‘Robotaxi’ project which should be unveiled on August 8 and the prospect of the launch of an entry-level vehicle, the ‘Model 2’ by 2025/2026.

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