To The Moon

Would you prefer to wait for a bargain buy if you know the product that you’re interested in is giving more and more discount every month to attract buyers in this volatile market condition?

Here comes Tesla. For the fifth cut in price since the start of 2023, TSLA extends 2% to 6% discount drive on its electric vehicles that analysts caution could hurt profitability.

Tesla cut prices on both versions of its Model 3 sedan by $1,000 and on its Model Y crossover by $2,000, the website showed. It also cut prices on both versions of its more expensive Model S and Model X by $5,000.

• Model S AWD: $84,990 (from $89,990)

• Model S Plaid: $104,990 (from $109,990)

• Model X AWD: $94,990 (from $99,990)

• Model X Plaid: $104,990 (from $109,990)

• Model Y AWD: $49,990 (4680 model likely)

• Model Y LR: $52,990 (from $54,990)

• Model Y P: $56,990 (from $58,990)

5 cuts so far, 5 more to go? Hi 👋 guys!

The company has said the tougher U.S. standards would reduce the $7,500 tax credit available for its base, rear-wheel drive Model 3 since January.

Some analysts who expected the further price cuts had flagged concern that Tesla's industry-leading profit margins could be at risk.

This week Tesla reported first-quarter deliveries of almost 423,000 vehicles, up just 4% from the prior quarter after price cuts in the United States, China and other markets aiming to spur demand.

When Elon Musk first started cutting prices for Tesla vehicles, some observers took it as a sign of weakness. So just how true is it anyways?

Price cuts are helping Tesla‘s (ticker: TSLA) sales and boosting its market share in Europe and elsewhere actually.

New data show that the electric-vehicle maker’s European sales grew faster than those of any other car manufacturer in February. European Union registrations of Tesla cars, which reflect sales, rose to 19,249 this February from 12,860 in the same month the previous year, according to the European Automobile Manufacturers’ Association. 

Tesla’s registrations represented 2.4% of the total EU passenger car market last month, up from 1.8% the year before. Total EU passenger car registrations rose by about 12% from the previous year, coming in at about 803,000 units, while battery-electric vehicle, or BEV, registrations were up 40% at about 97,000 units, accounting for about 12% of total sales.

For February, Tesla registrations accounted for about 20% of battery-electric vehicle registrations in Europe, up about two percentage points year over year.

In the first two months of 2023, Tesla’s market share of BEV sales also increased in China, according to data from the China Passenger Car Association. That monthly data includes vehicles produced in China and exported.

Monthly data from any country can fluctuate based on a number of factors. Taken together, however, the various data show that Tesla’s price cuts are having a positive impact on its market share.

“EV price cuts are not a fad, but a trend,” wrote Morgan Stanley analyst Adam Jonas in a Monday report. Lower battery costs, lower lithium prices, and more-efficient manufacturing are leading to a EV “deflationary trend,” adds the analyst.

He believes Tesla is the industry’s cost leader and will continue to lead on pricing. Jonas rates shares Buy and has a $220 price target for the stock.

Tesla’s growth of nearly 50% outstripped that of rivals such as Volkswagen (VOW.Germany), which increased registrations by 18%. That figure includes all VW sales. The German car maker is also targeting growth in the electric-vehicle market. 

For 2023, Tesla previously said it expects to produce 1.8 million cars and implied it intends deliveries around that amount. Company executives said they're aiming for 50% annual growth on average in production volume and sales over a multiyear horizon.

Achieving that level of growth will likely require further price cuts, some analysts said. Tesla has cut the price of its base Model 3 by a cumulative 11% since the start of the year, with a 20% reduction on its base Model Y.

Tesla shares are down by 12.5% to $185.06 from the high at $208 after the delivery and production numbers update on Monday. Market share helps, but car stocks are trading a little like bank stocks these days. Cars are credit-based purchases, so the health of the banking sector matters.

Lower high & lower low this whole week

⚠️ Trading Tips: The stock price has been free falling since Monday after TSLA delivery numbers are reported. Elon’s younger brother's $20M sales of shares is not helping. ⭐️ Looking at calls above 187 with the latest price cut news and puts under $180 for a further breakout to the downside if the discounted price strategy is not well received next Monday.

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