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 electric-vehicle tax credit, which will be available through March. Tesla 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 down nearly 2% in late-afternoon trading Friday. Since the start of last year, the stock has plummeted more than 65%.
Many investors fear that Tesla's sales slowdown will persist and have grown concerned about the erratic behaviour 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 Guidehouse Research e-Mobility analyst Sam Abuelsamid.
Based on the current short delivery times for Tesla vehicles that once were months long, Tesla's once-sizable order backlog may have been depleted, said Scott Case, CEO of Recurrent, who analyses the new and used EV markets.
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