Tesla, Inc. TSLA recently announced that it will cut prices of its electric vehicles by around 6% in North America, as the firm ramps up car production at the Fremont plant. The price reduction comes as a result of the region’s dwindling auto demand over weeks of lockdown that has now begun to ease.

Per the company’s website, Model S sedans will now be priced at $74,990, down from $79,990. Its Model X sport utility vehicles (SUVs) are now priced at $79,990, from $84,990, and the cheapest Model 3 sedan will be $2,000 cheaper, priced at $37,990.

Moreover, Tesla will introduce price cuts in China, after price adjustments in the United States. It will slash prices for the Model S and Model X it imports by around 4%, but will keep the prices of locally-made Model 3 cars unchanged.

Meanwhile, robust production levels from the new Gigafactory in Shanghai bode well for Tesla’s growth. The Shanghai factory is ramping up well and commands a higher market share in the Chinese EV market. The plant is operating at full capacity, and will continue to generating solid revenues. Accelerated production from Gigafactory 4 in Berlin will also add to the top line.

The company also plans to roll out the new million-mile battery in collaboration with Contemporary Amperex Technology Ltd (CATL), at the earliest this year or in 2021, for its Model 3 in China. The battery prices are expected to be $100/kWh, the level at which electric vehicles (EVs) reach rough parity with internal combustion competitors.

Zacks Rank & Other Key Picks

Currently, Tesla carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the same sector are Veoneer, Inc. VNE, Unique Fabricating, Inc. UFAB and Adient PLC ADNT, each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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