As its stock continues to hit stratospheric levels, Tesla Inc. is looking to make sure it continues finding ways bolster sales of its newest vehicle, the Model Y, by cutting the price of the new compact ute by $3,000.
The Model Y, which began production in late February, can now be had starting at $49,990, which is down from its previous price of $52,990.
The world’s largest EV maker has strategically cut prices on its vehicles during the last 18 months to spark new sales or, as was the case in China earlier this year, ensure its vehicles are eligible for price-based incentives.
The newest price cut follows a reduction in May on Tesla’s Model 3, Model X and Model S. The California-based company hustled to make production targets for the second quarter of the year, with CEO Elon Musk emailing employees to implore them to keep the pedal to the metal.
This followed news that Tesla was in talks with officials near Austin, Texas, to secure land – and incentives – to build its next Gigafactory there. The new plant will build batteries as well as the coming Cybertruck.
The price cut helped put a charge in Tesla stock, which surged 7% Monday to a record high — a phrase commonly tied to Tesla and its stock in recent weeks. In fact, the price has risen more than 60% during that time on a string of positive events for the company.
The company’s second-quarter production results really catapulted the stock to a new level. Exceeding Wall Street estimates at the height of the COVID-19 pandemic gave investors a massive justification for throwing its support behind the company.
The run is expected to continue as analysts and investors believe the company will show a profit in its quarterly report on July 22, Reuters reported. That would mark Tesla’s first cumulative four-quarter profit, a key requirement for it to be added to the S&P 500, the news agency notes.
The early run up to nearly $1,800 a share added $24 billion to Tesla’s stock market value. A push that’s all the more impressive when compared to General Motors market cap of $35 billion. The run up made Tesla worth nearly 10 times the Detroit-based automaker at about $310 billion.
However, the stock has given back all that it gained and in late afternoon trading was down about 2% on the day, just above $1,540 per share.