(BFM Bourse) – The electric vehicle specialist has decided to lower its prices in the United States but also in Europe. Its price fell just like that of European manufacturers.
Tesla triggers a butterfly effect on the stock market. In agony on Wall Street last year (over one year the value fell by 64%), the car manufacturer specializing in electric vehicles is trying to raise the bar, after several quarters of disappointing business results.
In the last quarter the group had, for example, delivered “only” 406,000 vehicles against more than 420,000 units expected by analysts. Over the year as a whole, the company recorded “only” 40% growth in deliveries, while the group is aiming for a figure of 50% per year. After this disappointment, announced last week, the group has decided to lower its prices in the United States, with reductions reaching between 6% for the Model 3 and 20% for the Model Y, reports Bloomberg. These decisions are not limited to the country of Uncle Sam, and also concern Germany, the United Kingdom and France.
In France, the Model 3 goes back under 40,000 euros and the Model Y under 47,000 euros, explain our colleagues from BFM Auto. The group had already cut its prices in China a few months ago.
A risky calculation
With the increase in its production capacities – the American media notably indicated this week that the group intended to spend 770 million dollars to extend its factory in Austin, Texas – the group is thus clearly emphasizing volumes, even if it means cutting in the unit margin.
“There will be a significant impact on Tesla’s gross margin in the near term, and the calculation depends on how long these new price levels last,” Evercore ISI analyst Chris McNally wrote as quoted by Bloomberg. “Even if the cuts only apply for part of the year and Tesla partially reverses them, 2023 earnings per share could be 30% to 40% below current consensus,” he said. .
Tesla stock takes another warning shot following this decision. In pre-opening trading on Wall Street, it dropped 6.1%.
Pricing power under threat
But beyond the manufacturer led by Elon Musk, it is the entire automotive compartment that is wavering. On Wall Street, still in pre-opening, Ford lost 3.3% and General Motors lost 3.6% around 2:30 p.m.
In Europe, Stellantis lost 3.6%, showing the biggest drop in the CAC 40 followed by…Renault with a decline of 2.8%. Volkswagen for its part bends by 3%.
Last year, car manufacturers were able to heal their operating margins thanks to significant price increases, thus using their “pricing power”. But Tesla’s price drop may spell the end of hopes for robust price effects this year.
“Tesla comes to put pressure on everyone. When you have a competitor who cuts prices by looking for volume, it puts competitors in an uncomfortable position, when they were hoping for a ‘pricing’ [un environnement de prix] favorable on electric vehicles”, considers a financial analyst.
Julien Marion – ©2023 BFM Bourse
Are you following this action?
Receive all the information about TESLA INC. in real time :