Tesla increases price of Model S, X in U.S. after shares slump
Tesla shares slid 9.7% on Thursday, their biggest drop since Jan. 3, after Chief Executive Officersuggested the company will keep cutting prices to stoke demand. The stock traded up 1.8% before the start of regular trading Friday.
“We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin,” Musk told analysts late Wednesday. Tesla moving around prices of its higher-end vehicles is much less meaningful to its bottom line than adjusting what it charges for the Model 3 or Y. The company sold just 10,695 Model S and X vehicles in the first quarter, about 2.5% of total deliveries. While Musk has said the two vehicles are “of minor importance” to Tesla’s future, the company recently started exporting them again from its California car plant.
Tesla’s automotive gross margin excluding sales of regulatory credits dipped to 19% for the quarter, below the 20% threshold that Chief Financial Officer Zachary Kirkhorn said three months ago the company expected to stay above this year. Its operating margin shrank to 11.4%, a roughly two-year low.
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