As Tesla slashes prices and introduces used Teslas from Hertz into the market, electric vehicles are becoming more affordable for the average car buyer. The arrival of the new 2024 Model 3 Highland in the United States has resulted in an abundance of 2023 Model 3 vehicles appearing on Tesla's official inventory page. When you factor in Hertz's offerings and Tesla's own sales of pre-owned cars, pricing becomes even more intriguing.

Tesla Slashes Prices

Tesla's stock performance has been less than stellar this year, ranking among the worst-performing blue-chip stocks on Wall Street and one of the top five decliners on the S&P 500, with a 2024 decline of approximately 15%.
The anticipation is that the decreasing costs of battery materials will enable Tesla to demonstrate a modest improvement in its profit margin compared to the previous quarter. Reuters provided details about this latest development from Tesla.

Meanwhile, according to Forbes, Hertz's recent actions have led to an influx of affordable Tesla Model Y and Model 3 vehicles in the market. Tesla itself also offers a significant number of pre-owned vehicles. For instance, you can find a used 2021 Model Y with 44,791 miles listed at $31,900 on Tesla's official used car website.

In contrast, a 2022 Model Y with 67,983 miles is available on Hertz's platform for $34,900. Similarly, a pre-owned 2021 Model 3 with 45,213 miles starts at $27,400 on Tesla's website. Conversely, Hertz offers a 2023 Tesla Model 3 base model for $30,999, featuring only 14,878 miles. This situation has caused a significant shift in the pricing of these Tesla vehicles in the market.

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Tesla's Production, Demand

Reports explained Tesla's current situation. Tesla has recently announced price cuts following the suspension of production at its German factory from January 29 to February 11 due to component shortages caused by disruptions in shipping routes due to Red Sea attacks.

On Wall Street, there is anticipation for Tesla to set a delivery target for the year, with analysts estimating it to be 2.19 million vehicles, a 21% increase from 2023 but significantly below Elon Musk's long-term target of 50% growth set three years ago.

What Analysts Say

Ahead of Tesla's fourth-quarter earnings release scheduled for after Wednesday's trading session, Morgan Stanley analyst Adam Jonas, a highly respected Tesla observer in the financial world, is preparing for more negative developments. TheStreet had details about this news concerning Tesla.

Furthermore, the analyst expressed concerns about the global imbalance in the electric vehicle (EV) sector. The supply is rising and demand is declining. This position suggests a challenging future for the global EV market, with signs of halting momentum and an excess of EVs on the road.

Regarding price reductions - like Tesla slashes prices, Jonas pointed out that the cuts in China and Europe have already equaled or exceeded his earlier predictions for the entire year.

He also highlighted that Tesla's recent actions in Germany, including production suspension due to supply disruptions caused by attacks on cargo ships in the Red Sea, have occurred shortly after the company's price adjustments.

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