Tesla’s Price Cuts Might Not Be Over. It’s Bad News for Margins, Goldman Says.

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Tesla shares have more than doubled this year so far.

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Tesla has been putting pressure on the entire electric-vehicle industry with the series of price cuts it has rolled out this year. The EV maker could continue its campaign next year, which would continue to hurt its margins, according to analysts at

Goldman Sachs

(ticker: TSLA) price cuts for its Model S and Model X vehicles will take a toll this year, according to Goldman’s Mark Delaney. The reductions will only be partially offset by higher prices for the Model 3, resulting in lower average selling prices across Tesla’s range and therefore gross margins, Delaney wrote in a research note. 

“We believe that Tesla could further lower prices in 2024 to support higher volumes which we believe will mitigate the earnings per share benefit from cost reductions,” Delaney wrote. 

Goldman’s analysts lowered their forecast for the EV maker’s earnings per share, including stock-based compensation, to $2.90 this year from $3.00 previously. They lowered their 2024 EPS forecast to $4.15 from $4.25. 

Goldman’s forecast for this year is broadly in line with the consensus call for $2.89 among analysts tracked by

Its forecast for 2024 compares with the consensus estimate of $4.50. 

Tesla is still set to deliver around 2.3 million vehicles in 2024, according to Delaney. That is in line with Wall Street estimates and would be up from an expected 1.8 million deliveries this year.

Delaney kept a Neutral rating on the stock with a 12-month target price of $275. Tesla shares were down 2.5% at $267.51 in early trading on Monday. They have more than doubled so far this year. 

Write to Adam Clark at adam.clark@barrons.com

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