Tesla Inc stock plummeted on Thursday after the luxury electric carmaker began offering $7,500 discounts on Model 3 and Model Y vehicles delivered in the United States this month, fuelling concerns that the company will face softening demand as economies slow.
Tesla began offering a $3,750 "credit" on Model 3 and Model Y vehicles delivered before the end of the year on December 1. On Wednesday, it increased the credit to $7,500. It also recently began providing free supercharging for 10,000 miles (16,093 kilometers) for vehicles delivered in December.
The unusual price cuts come after a series of price increases by Tesla in recent years, which it blamed on supply chain disruption and inflation.
Tesla shares closed down 8.9%, on track for their worst month ever, as concerns grow about slowing demand for electric vehicles and Chief Executive Elon Musk's distraction with Twitter, which he purchased in October.
Tesla underachieved the broader market, which dropped as data showing a resilient economy fueled concerns about the Federal Reserve's interest rate hike path.
Musk predicted on Thursday that the economy will be in a "serious recession" in 2023, with lower demand for big-ticket items.
Analysts have reduced their forecasts for Tesla's vehicle deliveries in the current quarter, owing to slowing growth in key markets such as the United States and China.
"The fact they seem to be cutting price to increase deliveries volumes doesn't raise confidence, particularly at a time where we see increasing competition," Craig Irwin, a senior analyst at ROTH Capital Partners, said.
Because the US government intends to implement tax credits to stimulate EV demand beginning in January, Tesla customers have delayed purchases until the incentives take effect, weighing on demand.
The latest discount comes just days after the US Treasury Department delayed restrictions on EV incentives until March, implying that Tesla and other American-made electric vehicles will likely be eligible for the full $7,500 in incentives from January to March.
In Canada, Tesla is also offering a $5,000 credit on Model 3 and Model Y vehicles delivered before the end of the year. In addition, the automaker has offered a 6,000 yuan ($860) discount on certain models in China until the end of 2022.
Tesla announced in October that it would miss its vehicle delivery target for this year, but downplayed concerns about demand after its revenue fell short of Wall Street expectations.
(Source:www.businesstoday.in)
Tesla began offering a $3,750 "credit" on Model 3 and Model Y vehicles delivered before the end of the year on December 1. On Wednesday, it increased the credit to $7,500. It also recently began providing free supercharging for 10,000 miles (16,093 kilometers) for vehicles delivered in December.
The unusual price cuts come after a series of price increases by Tesla in recent years, which it blamed on supply chain disruption and inflation.
Tesla shares closed down 8.9%, on track for their worst month ever, as concerns grow about slowing demand for electric vehicles and Chief Executive Elon Musk's distraction with Twitter, which he purchased in October.
Tesla underachieved the broader market, which dropped as data showing a resilient economy fueled concerns about the Federal Reserve's interest rate hike path.
Musk predicted on Thursday that the economy will be in a "serious recession" in 2023, with lower demand for big-ticket items.
Analysts have reduced their forecasts for Tesla's vehicle deliveries in the current quarter, owing to slowing growth in key markets such as the United States and China.
"The fact they seem to be cutting price to increase deliveries volumes doesn't raise confidence, particularly at a time where we see increasing competition," Craig Irwin, a senior analyst at ROTH Capital Partners, said.
Because the US government intends to implement tax credits to stimulate EV demand beginning in January, Tesla customers have delayed purchases until the incentives take effect, weighing on demand.
The latest discount comes just days after the US Treasury Department delayed restrictions on EV incentives until March, implying that Tesla and other American-made electric vehicles will likely be eligible for the full $7,500 in incentives from January to March.
In Canada, Tesla is also offering a $5,000 credit on Model 3 and Model Y vehicles delivered before the end of the year. In addition, the automaker has offered a 6,000 yuan ($860) discount on certain models in China until the end of 2022.
Tesla announced in October that it would miss its vehicle delivery target for this year, but downplayed concerns about demand after its revenue fell short of Wall Street expectations.
(Source:www.businesstoday.in)
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