Funviralpark Dec 22 (Reuters) – Shares of luxury electric car maker Tesla Inc (TSLA.O) plunged on Thursday as the economy slowed.
On December 1, Tesla began offering $3,750 in “credits” for Model 3 and Model Y vehicles delivered by the end of the year. We increased the credit to $7,500 on Wednesday. And most recently, he started offering 10,000 miles (16,093 km) of free supercharger on vehicles delivered in December.
The rare price cut follows a string of price hikes by Tesla over the past few years due to supply chain disruptions and inflation.
Tesla’s stock fell 8.9%, heading into its worst month ever. This comes amid softening demand for electric vehicles and growing concern over Elon Musk, who bought it in October, over his Twitter distractions.
Tesla underperformed the broader market as data pointing to a resilient economy fueled concerns about a Federal Reserve rate hike.
Musk said Thursday that he expects the economy to enter a “deep recession” in 2023, reducing demand for big-ticket items.
Analysts have lowered estimates for Tesla’s vehicle shipments for the quarter, reflecting slowing growth in key markets such as the United States and China.
Craig Irwin, senior analyst at ROTH Capital Partners, said: “The fact that they appear to be cutting prices to boost deliveries doesn’t boost confidence, especially in a time of increased competition. ‘ said.
With the U.S. government planning to introduce a tax credit to spur EV demand starting in January, Tesla customers are holding off on buying until incentives take effect, weighing down demand.
The latest discounts come just days after the U.S. Treasury Department delayed restrictions on EV incentives until March. This means that Tesla and other US-made electric vehicles, at least, are eligible for the full $7,500 incentive from January through March.
Tesla is also offering a $5,000 credit in Canada for Model 3 and Model Y vehicles delivered by the end of the year. The automaker has also given his 6,000 yuan ($860) discount on select Chinese models through the end of 2022.
Tesla said in October that it would miss its delivery targets for this year, but concerns about demand were downplayed after sales fell short of Wall Street estimates.
($1 = 6.9761 yuan)
Reported by Hyunjoo Jin from San Francisco, Jaiveer Singh Shekawat from Bangalore, Maria Ponnezhath and Nivedita Balu. Edited by Tom Hogue, Emelia Sithole-Matarise, Shounak Dasgupta, Leslie Adler
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