NATIONAL NEWS

Tesla sales rise 36% in first quarter, following price cuts

Apr 2, 2023, 9:32 AM | Updated: 1:42 pm

DETROIT (AP) — Tesla’s first-quarter vehicle sales rose 36% after the company cut prices twice in a bid to stimulate demand.

The electric car, SUV and heavy truck maker said it delivered 422,875 vehicles worldwide from January to March, up from just over 310,000 a year ago. But the increase fell short of analyst estimates of 432,000 for the quarter, according to FactSet. The first quarter sales were a record for the company.

Tesla cut prices in early March on its more expensive models, the S and X, by $5,000 to as much as $10,000. In January it slashed the sticker numbers on several versions of its EVs, making some eligible for a U.S. $7,500 federal tax credit. Some versions of the top-selling Model Y small SUV saw price trims of nearly 20%, and the base price of the Model 3 small car was dropped by 6%.

The price cuts appeared to have raised demand despite increasing interest rates designed to slow the economy and curb inflation. Since the U.S. Federal Reserve began raising rates in March of last year, the average new vehicle loan has jumped from 4.5% to 7%, according to Edmunds data.

Analysts are watching to see if the price drops cut into the company’s profit and margins per vehicle. Tesla says it will release first-quarter earnings after the markets close on April 19.

The Austin, Texas-based company said it sold 412,180 Model Y and Model 3s for the quarter, up almost 40% from the 295,324 sold a year ago.

But sales of the aging Model X large SUV and Model S big sedan fell nearly 38% to 10,695.

When Tesla cut prices, some analysts wondered whether demand was slowing. Others suggested the company was taking advantage of its higher profit margins in a bid to pull market share from upstart companies and legacy automakers that are starting to sell more EVs. Some analysts predicted the start of a widespread price war that has yet to materialize, at least in the U.S.

The growth rate in Tesla’s sales, while impressive, was below the pace needed to reach the company’s pledge to increase deliveries about 50% per year into the foreseeable future.

Tesla produced more vehicles than it sold during the first quarter, making 440,808 as it ramped up production at new factories near Austin, Berlin and Shanghai.

In a note to investors Sunday, Jefferies analyst Philippe Houchois wrote that Tesla’s “excess production over deliveries” will keep the debate going over whether there’s demand weakness or if the price cuts will raise demand.

During Tesla’s investor day event in early March, CEO Elon Musk conceded that affordability remains a drag on sales but said many people still want to buy a Tesla. “The limiting factor is their ability to pay for a Tesla,” he said.

The top-selling Model Y, for instance, starts at $54,990, while the Model 3’s base price is $42,990. A Model S has a starting price of $89,990, while the X starts at $99,990.

Tesla also has been coming under increasing scrutiny from U.S. safety regulators, who have opened multiple investigations and stop for no reason.

National News

Wall Street Journal reporter Evan Gershkovich stands in a glass cage in a courtroom in Yekaterinbur...

Associated Press

U.S. reporter Evan Gershkovich appear in court in Russia for hearing on espionage charges

Wall Street Journal reporter Evan Gershkovich appeared in court in Russia on Thursday for the second hearing in his trial on espionage charges, the court said. Gershkovich, his employer and the U.S. government vehemently deny the charges against him. Gershkovich was accused by the Russian Prosecutor General’s office of “gathering secret information” on orders from […]

1 hour ago

FILE - A pedestrian traverses the rotunda inside the New Mexico Capitol, March 16, 2023, in Santa F...

Associated Press

New Mexico governor cites ‘dangerous intersection’ of crime and homelessness, wants lawmakers to act

SANTA FE, N.M. (AP) — Citing what she calls the “dangerous intersection” of crime and homelessness, New Mexico’s governor is calling on lawmakers to address stubbornly high crime rates as they convene Thursday for a special legislative session. In issuing her proclamation, Gov. Michelle Lujan Grisham talked about a vulnerable segment of society that falls […]

3 hours ago

Republican presidential candidate former President Donald Trump arrives on third day of the Republi...

Associated Press

FACT FOCUS: Trump, in Republican convention video, alludes to false claim 2020 election was stolen

DONALD TRUMP, alluding that the 2020 vote was stolen: “Whether you vote early, absentee, by mail or in person, we are going to protect the vote. That’s the most important thing we have to do is protect the vote. Keep your eyes open because these people want to cheat and they do cheat. And frankly, […]

4 hours ago

Supporters cheer as Republican presidential candidate former President Donald Trump arrives for a c...

Associated Press

‘One screen, two movies’: Conflicting conspiracy theories emerge from Trump shooting

WASHINGTON (AP) — A former president is shot, the gunman quickly neutralized, and all of it is caught on camera. But for those who don’t believe their eyes, that’s just the start of the story. For some supporters of former President Donald Trump, the failure of the Secret Service to prevent the attempted assassination point […]

4 hours ago

Associated Press

Hundreds attend vigil for man killed at Trump rally in Pennsylvania before visitation Thursday

SARVER, Pa. (AP) — Hundreds of people who gathered to remember the former fire chief fatally shot at a weekend rally for former President Donald Trump were urged to find “unity” as the area in rural Pennsylvania sought to recover from the assassination attempt. Wednesday’s public event was the first of two organized to memorialize […]

4 hours ago

California delegate T. Tran holds his phone with an image of Republican presidential candidate form...

Associated Press

What to watch as the Republican National Convention enters its fourth day in Milwaukee

MILWAUKEE (AP) — The Republican National Convention culminates Thursday with former President Donald Trump expected to accept the party’s presidential nomination, achieving a comeback four years in the making and anticipated even more in the past week in light of Saturday’s assassination attempt. Trump is expected to accept his third consecutive party nod in prime […]

4 hours ago

Tesla sales rise 36% in first quarter, following price cuts