Tesla (TSLA) is trimming the costs of its Model 3 and Model Y EVs. Most versions of the Model 3 are getting a price cut of $1,250, while the long-range version of the Model Y SUV is now $2,000 cheaper. It comes after the EV maker reported third quarter deliveries that missed expectations. Yahoo Finance Live discuss the latest price cuts.

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Video Transcript

BRAD SMITH: Let's also talk about shares of Tesla this morning. They are on the move in extended hours as the car manufacturer sees shares decline by about 2.4%. They are changing their prices for [? checks ?] [? notes ?] the sixth time this year.

This time they are slashing prices for its Model 3 and Model Y this morning. Earlier this week, the company missed market estimates for its third quarter deliveries after upgrades to its factories forced production to come to a standstill. There you're taking a look at shares as we mentioned here, but again, we talked about the price wars earlier this week, especially when we were getting some of the production, the delivery numbers pretty much around the globe from EV manufacturers and nonEV manufacturers, but what automobile company isn't talking about EV manufacturing at this point in time?

But all this considered, Tesla trying to make sure that it not only retains the market share that it's been able to amass in the EV landscape-- EVs still represent less than 10% of the [? autopurchasing. ?]

So even as you see mandates start to be put in place in certain regions around the world, China most notably one of those entities or one of those nations that has instituted this and that increases year-over-year, Tesla is not only trying to get people into their ecosystem but trying to maintain them there, and that's where these price cuts make even more of a difference in just trying to get people into it so that you can eventually get into a relationship with that customer of a trade-in, trade-up perhaps long term.

SEANA SMITH: Yeah, and I think Tesla is evident in the delivery numbers that they reported earlier this week. They potentially needed to price cuts even further in order to boost demand. They had already cut prices by about 15% to 20% on some models, but they still fell significantly short of the earlier in the year volume expectations that we had-- that we heard laid out here from Tesla.

In terms of the pressure that this could put on margins, obviously, a huge issue on the street. JP Morgan out with a note earlier this week ahead of these price cuts that we're just getting today saying that the large declines in average selling price has exacerbated the impact that we're seeing on the volume shortfall on all other performance metrics.