Tesla cuts Model Y price and cancels standard range version

Tesla cuts Model Y price and cancels standard range version...

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Tesla cut the price of its Model Y crossover by $3,000, less than four months after beginning delivery, and cancelled a lower-priced standard-range version.

Tesla said it delivered about 90,650 vehicles in the second quarter, beating analyst estimates. But Tesla has been combining Model 3 and Model Y totals in its vehicle production and delivery reports at the end of each quarter, so there's no easy and precise way for shareholders to gauge the success of the Model Y.

Vicki Bryan, CEO of investment research firm Bond Angle, believes the move shows the Model Y is not profitable.  

Tesla cut the price of its newest offering, the Model Y, by $3,000, just four months after starting deliveries to customers. On Sunday, CEO Elon Musk also said the company was cancelling plans to produce a less-expensive standard-range version of the crossover SUV, saying that its expected range of less than 250 miles would be "unacceptably low."

Now, the lowest-priced Model Y, the long-range all wheel drive version, starts at $49,990, according to Tesla's website. The standard-range version would have started at $39,000.

The Model Y moves indicate demand for Tesla's electric vehicles is flagging in the company's home base of the United States, says Vicki Bryan, CEO of investment research firm Bond Angle.

According to Bond Angle estimates, Tesla faced more than a 50% drop in demand for its Model 3 sedans in the U.S. in the second quarter, and has yet to see high demand for the Model Y since launching it, despite positive reviews by auto critics.

Selling Model 3s for the first time in China, where Tesla operates a plant in Shanghai, helped its second-quarter numbers. Tesla said it delivered about 90,650 vehicles in the second quarter, beating analyst estimates. But Tesla has been combining Model 3 and Model Y totals in its vehicle production and delivery reports at the end of each quarter, so there's no easy and precise way for shareholders to gauge the success of the Model Y.

Also, Tesla has never disclosed how many pre-orders came in for the Model Y. Musk and Tesla have in the past talked about pre-orders for other vehicles including the Model Y's predecessor, the Model 3, and successor, Cybertruck.