In its first-quarter earnings report, Elon Musk’s Tesla performed drastically below average. The automotive company’s total revenue slid 9% compared to 2024. Meanwhile, the revenue dropped 20% in the same period last year. On technical grounds, such low performance of Tesla was attributed to the refreshed version of the Model Y (sport utility vehicle) SUV. At the same time, critics of Musk censured the CEO for not paying the required attention to the company.
Tesla Offering Discounts on Model Y
As a counter strategy, Tesla is now offering discounts on the Model Y, offering reduced interest rates in the US. The EV giant announced
“1.99% APR or $0 Due at Signing available for well-qualified buyers.”
This offer will provide a direct discount to buyers, saving a few thousand dollars; however, the question is, will it provide a bigger edge to the EV giant, regaining its position in the market and strengthening its Q2 report?
Chances are Low
According to Electrek, it's a ‘NO’. The analysts opined that although Model Y will be a major contributor to the company, it won’t help Tesla regain its growth this year. The RWD Model Y is already being sold in China, but it is not making a big difference even after 0% financing. Although the US market is stable and with a discount offer, the sale may boost up; however, considering the competition given by other vehicles like BMW iX and ICE Mercedes, chances are low.
Additionally, Trump's tariffs on Chinese imports will also make a strong impact on the sales of Tesla, as the company sources LFP battery cells from China. Although Tesla makes most of its US cars domestically and has a factory for Model Y and Model 3 in Shanghai, but the counter tariffs and retaliation by China, the largest EV market, will have a negative impact on the Q2 earnings.
To cut a long story short, after the bad performance of Tesla in its Q1, Musk pledged to pay more attention to the company, but it won’t help much. Considering the ongoing situation of Model Y sales in China and now in the US, the Model Y may help soften Q2 losses, but there are very low chances that it would reverse the downward trend.
