Last year, Tesla unveiled the Model Y crossover sport utility vehicle as the latest consumer vehicle in its line up. Now, less than a year after it went into production and only months after the first delivery, Tesla is cutting the price on the car by $3,000, bringing the sticker down to $49,990. The performance version will be updated with a new configuration.
Tesla said in April that the Model Y was already profitable, which was the first time that one of its products turned a profit in its first quarter, and brings up the question of why the company would lower the price if things are going so well.
Overall, Tesla delivered 90,650 vehicles during the second quarter, above estimates for 74,130 vehicles, which helped propel its stock to more than $1,300 and made the company the most valuable auto manufacturer on the planet, even though it produces about one half of one percent of all cars.
While Tesla has proved there is a market for electric cars, it still hasn’t proven that there is a big enough market to justify the company’s stock price or the move to electric vehicles by other manufacturers. Tesla has plenty of inventory available for anyone that wants a car from them.
Do you want one? Does your neighbor? For all the hype, the company remains a niche player.