With sales slowing and stock prices falling, Tesla Inc. dramatically reduced prices on some versions of electric vehicles, making some models eligible for a new federal tax credit that could help buyer interest.
The company slashed prices by nearly 20% in the United States on some versions of its best-selling Model Y SUV. The cuts will make more versions of the Model Y eligible for a US$7,500 electric vehicle tax credit that will be available through March. It also reduced the base price of the Model 3, the most expensive model, by about 6%.
Far from cheering investors, the sharp price cut sent Tesla shares down about 4% in early trading on Friday. Since the beginning of the year, the stock has fallen more than 65%. Many investors fear that the decline in sales will continue and are increasingly worried about the behavior of CEO Elon Musk and the disruption caused by the purchase of Twitter for $ 44 billion.
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 profit margins, at least in the near term.
A message was left Friday seeking comment from Tesla on the reason for the price cut.
Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter that examines what leaders need to succeed. Log in here.