Tesla Inc.'s decision to sharply cut prices is expected to have a short-term impact on fourth-quarter earnings, but longer-term implications for the EV maker as it juices demand at the cost of profits, analysts said.
Retail and institutional investors want to hear from CEO Elon Musk on the fourth-quarter earnings call Wednesday on Tesla's pricing strategy as the automaker defends its EV market share, which sits at about 65 percent in the U.S.
Tesla temporarily cut prices in December to clear inventory, offering $7,500 discounts in the U.S. That was followed by January's open-ended price cuts for new orders of up to 20 percent. The bestselling Model Y crossover saw a $13,000 reduction, in addition to newly qualifying for a $7,500 tax break under last year's Inflation Reduction Act.
Musk said in December he expects an economic slowdown this year to weigh on vehicle demand across the industry.
Among top questions submitted by retail and institutional investors for consideration on the earnings call after the market close on Wednesday is one asking whether the automaker would provide forward guidance on average selling price per vehicle and gross margins as a result of the price cuts.