TSLA Stock Alert: Tesla Plunges on Another Round of EV Price Cuts

$Tesla(TSLA.US)$ stock fell 5% as the electric vehicle (EV) maker launched another round of price cuts around the world.

Three models saw price cuts of up to $2,000. The company posted that, with federal tax credits, the cost of its best-selling Model Y sedan fell below $30,000.

Tesla also dropped the price of its Full Self-Driving (FSD) option by one-third, to levels last seen in 2020.

TSLA stock opened this morning at $140.60 per share, with a market capitalization of about $447 billion.

Difficult Days Ahead
CEO Elon Musk defended the changes, writing “Tesla prices must change frequently in order to match production with demand.” He added, “Only a fool thinks the ‘MSRP’ is the real price.” MSRP stands for Manufacturers’ Suggested Retail Price.

Tesla has prided itself on having a single price clearly marked for buyers. The Musk statement indicates that buyers may now be able to drive their own bargains.

If Tesla is indeed just another car company, the stock has much further to fall. $Toyota Motor(TM.US)$ is the world’s second most valuable car company at $308 billion. No other car company is worth as much as $100 billion. $General Motors(GM.US)$ is worth about $50 billion.

Tesla is due to report earnings on April 23 after the market closes, followed by a conference call with analysts. Some fear it may report negative free cash flow for the first time since early 2020.

Wedbush analyst Dan Ives, a longtime Tesla bull, wrote that “many long-time Tesla believers are giving up on the story and throwing in the white towel.”