Share
News

Struggling Tesla Forced to Make Dramatic Change to Lure Customers

Share

With its sales slowing and its stock price tumbling, Tesla Inc. slashed prices dramatically Friday on several versions of its electric vehicles, making some of its models eligible for a new federal tax credit that could help spur buyer interest.

The company dropped prices nearly 20 percent in the United States on some versions of the Model Y SUV — its top seller.

That cut will make more versions of the Model Y eligible for a $7,500 electric-vehicle tax credit that will be available through March.

The cut also reduced the base price of the Model 3, the company’s least expensive model, by about 6 percent.

Far from pleasing investors, the sharp price cuts sent Tesla shares down nearly 4 percent in midday trading on Friday. Since the start of the year, the stock has plummeted more than 65 percent.

Many investors fear that Tesla’s sales slowdown will persist, and they have grown concerned about the erratic behavior of CEO Elon Musk and the distractions caused by his $44 billion purchase of Twitter.

“I think the real driver for all of this is falling demand for Teslas,” said Sam Abuelsamid, an analyst for Guidehouse Research e-Mobility.

Itay Michaeli, an industry analyst at Citi, wrote in a note to investors that Tesla appears to be prioritizing sales volume over price — a strategy that could affect its profit margins, at least in the near term.

Messages were left Friday seeking a comment from Tesla.

Would you ever buy a Tesla?

The Model Y Performance version, formerly priced at nearly $70,000, now starts at just under $57,000.

The starting price of the Model 3, Tesla’s lowest-priced vehicle, was cut to just under $44,000 from $47,000.

The company’s decision to drop the base price of the Model 3, which already had been eligible for the federal tax credit, is a clear sign that demand had weakened, Abuelsamid said.

Tesla has added two huge factories — in Austin, Texas, and in Berlin — that are running at only a fraction of their output capacities, “which is undoubtedly costing them dearly,” Abuelsamid said.

The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.

Truth and Accuracy

Submit a Correction →



We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

Tags:
, , , , ,
Share
The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands. Photo credit: @AP on Twitter
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
Location
New York City




Advertise with The Western Journal and reach millions of highly engaged readers, while supporting our work. Advertise Today.

Conversation