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Home / Business / Tesla lowers prices for the S and X models as part of the stock market slump

Tesla lowers prices for the S and X models as part of the stock market slump



A Tesla Model S will be on display at the London Motor and Tech Show at ExCel on May 16, 2019 in London, England.

John Keeble | Getty Images News | Getty Images

Tesla has lowered prices for its two most expensive models and voiced concern about declining interest in its cars and the question of whether the company can generate enough cash to pay all their bills.

On Monday, Tesla received $ 3,000 from the Model S sedan and $ 2,000 from the SUV Model X.

The company said in a statement that it regularly adjusts prices and options available to other automakers. Price cuts were up on the previous month, as Tesla offered longer battery life and added a new drive system and suspension. The statement did not say whether a slowdown in sales influenced the decision.

The decision was made when Tesla's stock was under pressure from investors skeptical of CEO Elon Musk's ability to generate profits and grow the business, while balancing the need for self-driving development Driving system and the construction of new products such as a small SUV, a pickup, a new roadster and an electric semis.

"Tesla's business fundamentals have always been shaky, but the stock price has been fueled by the story that this is a company that will do tremendous things," said Navigant research analyst Sam Abuelsamid. "What we've seen in recent months or so is that people are starting to realize that maybe that's not really true."

The Palo Alto, Calif., Which has seen revenue growth this year, has encountered problems in attempting to transition from a niche luxury electric vehicle manufacturer to a mass market automaker. In order to control the costs and lower the price for the cheaper model 3, two dismissal rounds had to be carried out and some branches had to be closed.

Musk told employees that spending since the company's departure was being reviewed on a "Spartan diet" after losing $ 702.1

million in the first quarter. All this happened after Tesla had difficulty making the Model 3.

And Musk's own behavior was sometimes questionable. He disapproves of the Securities and Exchange Commission for posting important company information on Twitter. Last year he appeared to smoke marijuana during an interview. He cursed stock market analysts for asking questions about Tesla's finances and was charged with calling a diver who helped rescue a Thai youth football team from a flooded cave.

The Tesla share closed on Tuesday with a slight drop of $ 205.08. They fell more than 38% this year, cutting the company's market value by more than $ 20 billion to $ 36.5 billion.

With the price cuts, the Model S now launches at $ 71,250, while the Model X launches at $ 71,950. Both prices do not include tax credits for the federal government and the states.

Tesla stated in a statement that the price reductions for S and X are about 2% to 3%. The company has raised the price for its best-selling Model 3 by $ 400 over the past week, pushing the strike up to $ 35,400.

"According to reasonable standards, these small changes are not current," it says in a statement from the company.

The last quarter was one of the worst for Tesla in the last two years. Sales decreased by 31% in the reporting period. Musk forecast another loss in the second quarter, but said that Tesla would be profitable again in the third quarter.

In January, the automaker lowered its prices by $ 2,000 per vehicle, conceding that the tax credit for its electric drive is still pending cars will impact sales. The loan for Tesla will be phased out by the end of the year.

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