Tesla has introduced lower-cost models of its popular Model Y and Model 3 vehicles in the U.S. The new pricing is aimed at stimulating sales following the expiration of a significant U.S. tax credit for electric vehicles. The prices for these models are set to be $39,990 for the Model Y and $36,990 for the Model 3, which represent reductions of $5,000 from earlier versions. The carmaker’s stock, however, fell by approximately 4% after the announcement, indicating investor disappointment.
Tesla has faced challenges in the competitive electric vehicle market, having been slow to introduce more affordable options despite releasing a new Model Y version earlier this year. CEO Elon Musk previously indicated plans to develop a cheaper model but shifted focus to projects involving robotaxis and humanoid robots last year. The company’s core automotive business is currently under pressure due to various factors, including reduced government financial support for electric vehicles, increased competition from Chinese manufacturers, and recent consumer backlash tied to Musk’s political activities.
In its last quarterly report, Tesla revealed a 12% decline in sales, totaling $22.4 billion, marking the largest drop in a decade, driven by a 14% fall in vehicle deliveries. Despite reporting record electric vehicle sales for the recent quarter, this surge was viewed by analysts as largely due to consumer purchases ahead of the subsidy expiration. Following this change, Tesla vehicle prices rose by up to $7,500 in early October.
The newly released budget models will come without certain features included in higher-tier Tesla vehicles. These revisions are recognized by Tesla executives as a measure to mitigate the impact of the lost tax credit. The lower-cost models currently do not appear on Tesla’s UK website. Additionally, Tessla’s recent launch of the Cybertruck has produced modest results, with around 52,000 units sold in the U.S. since deliveries began in 2023.
Source: https://www.bbc.com/news/articles/cd9y3dvy491o?at_medium=RSS&at_campaign=rss