• Tesla slashed the price of its Model Y by $3,000, marking the first time the SUV's cheapest option fell below $50,000.
  • It's the second major price cut to Tesla vehicles in the four months the Model Y has been on sale.
  • As the company works to sustain its profits, the Model Y and its margins will be especially important.
  • Tesla's stock price has been on a tear for weeks, rising 322% since the beginning of the year to hit $1,794 per share on Monday.
  • Visit Business Insider's homepage for more stories .

Tesla has cut the price of its Model Y by $3,000, the second significant price cut to its vehicles in the four months the SUV has been on sale.

The cheapest Model Y powertrain option now begins at $49,990 for the long-range version, with the performance package fetching $59,990. The car was previously $52,990 since sales began in March.

Electrek, an electric vehicle blog, first spotted the discounts.

An even cheaper version of the Model Y, originally planned to go on sale in 2021, won't be happening, CEO Elon Musk said on Twitter, citing "unacceptably low" range in response to a question about the option being removed from Tesla's website. The car would get less than 250 miles of range on one battery charge, he said.

Earlier in July, Tesla announced second-quarter deliveries that shrank by less than Wall Street had anticipated, helping to set in motion the stock's record gains this month. Shares hit a record high of $1,794 Monday morning, according to Markets Insider data , up 322% from the beginning of the year, even as the coronavirus pandemic continues to weigh on the autosector.

And as the company works to sustain its profits in the face of temporary shutdowns at its two main car factories, the Model Y and its sales margins are key.

"ModelYwas profitable already in its first quarter of production," Musk told analysts in April, "something we haven't achieved with any product in the past."

Eventually, the company hopes to produce the Model Y at its under-construction factory near Berlin, Germany in addition to Fremont, California and Shanghai, China. Now, all eyes turn to its first-quarter earnings report on July 22, and its combined battery day and annual shareholder meeting in September, all three of which could provide further catalyst for continued share gains.

"We believe Musk & Co. are slated to announce a number of new potential 'game changing' battery developments at its highly anticipated Battery Day in September," Dan Ives, an analyst at Wedbush Securities, told clients Sunday. "Technology innovations around Giga/Fremont remain the key ingredients in Tesla's success on the battery front and we believe the company is getting closer to announcing the million mile battery. "

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