A recent report has shown that Tesla sales have seen significant year-on-year growth in key regions. Sales in the United States have surged by 14% year-to-date compared to the previous year, with an impressive 17% increase in August alone. In Europe, sales have grown by 18% year-to-date and registered a remarkable 25% year-on-year increase in key regions during August. Meanwhile, China has seen a 2% year-on-year rise in year-to-date sales, with a 3% increase recorded in August.
Tesla has implemented pricing changes in response to market demands. The company reduced the prices of its S/X models by 15-19% on September 1st and also lowered the pricing of its Model Y in China in mid-August. However, the pricing of the refreshed Model 3 has been raised in Europe and China.
The adjustments in pricing have led financial institution Goldman Sachs to revisit its earnings per share (EPS) estimates for Tesla in 2023 and 2024. Considering lower average selling prices and a corresponding decrease in auto gross margin, Goldman Sachs slightly lowered its EPS estimates for those years to $2.90 and $4.15, respectively.
Although regional sales data for Tesla has been strong in recent months, Goldman Sachs has decided to lower its volume estimates for the third quarter of 2023. The revised estimate now stands at 460,000 units. This adjustment is due to reduced demand for the S/X models and the effects of the transition associated with the Model 3 Highland.
Goldman analysts believe that Tesla may further decrease prices in 2024 to support higher sales volumes. While this could mitigate the earnings per share benefit from cost reductions, it is seen as a strategic move to drive future growth.
Despite the adjustments in pricing and volume estimates, shares of Tesla are down 0.91% in premarket trading on Monday.
– The original source article.
– Goldman Sachs analysis.