Tesla Inc (TSLA.O) has slashed prices of its electric vehicles in the United States and Europe, doubling down on a discount drive it started in Asia as demand slows against the backdrop of a weakening economy. The Elon Musk-led company missed its target in 2022 to grow deliveries by 50% annually and reported that sales of its China-made cars hit a five-month low in December, underlining the hit from rising interest rates and growing recession fears. The Associated Press has the story:
Tesla cuts vehicle prices to boost flagging demand
Newslooks- DETROIT (AP)
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% 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 U.S. electric vehicle tax credit that will be available through March. It also reduced the base price of the Model 3, its least expensive model, by about 6%.
Far from pleasing investors, the sharp price cuts sent Tesla shares sinking about 4% in early trading Friday. Since the start of the year, the stock has plummeted more than 65%. Many investors fear that the sales slowdown will persist and have grown concerned about the erratic behavior of CEO Elon Musk and the distractions caused by his $44 billion purchase of Twitter.
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 comment from Tesla on the reasons for the price cuts.
