Tesla started out the month of December by offering Model 3 and Model Y buyers in the U.S. a $3,750 credit if they have their vehicle delivered in December 2022. Now with a week left in the month, the electric vehicle maker has upped that discount to $7,500, according to the company’s website.
After the news of the discount and other offers designed to increase sales in the fourth quarter Tesla’s stock dropped another 9% and is trading at $125.12 at market close on Wednesday.
It seems Tesla is getting a little too thirsty for end-of-year sales and it’s giving investors the ick.
Tesla’s stock has already taken massive hits this week as investors wring their hands over CEO Elon Musk’s political rhetoric on and micromanaging of Twitter, his selling of Tesla stock to fund Twitter initiatives and concerns over vehicle sales in China — Tesla’s biggest market — taking a dip as the country abandons COVID-19 restrictions.
Along with the discount, Tesla has also tacked on offers of 10,000 Supercharging miles free and a “Holiday Software Release” that includes “wireless multiplayer gaming and access to tens of thousands of titles in the Steam game library,” a programmable light show that syncs with other Teslas, and “Dog Mode” that helps people keep an eye on dogs they’ve left in the vehicle.
The automaker is also offering credits in Canada and Mexico, and in October cut the price of cars in China.
The doubling of an already out-of-character discount is likely in response to the U.S. Treasury Department this week delaying EV tax credit rules around sourcing of critical materials to March 2023. Per the Inflation Reduction Act, by January 1, automakers would only have been eligible for the full $7,500 credit if they build their vehicles in North America and source critical materials from North America or free trade agreement countries — so not China, where most of those materials come from today. The delay means that many automakers, Tesla included, will now qualify for the full credit at the start of the year, which may cause buyers to put off purchases until 2023.
Tesla is running up against its own guidance this year, which projected a 50% growth in production and deliveries for 2022. That would mean 1,404,333 deliveries for the year, so Tesla has to hit 495,760 deliveries in Q4 to achieve that. In the third quarter, Tesla sold 343,830 units.
Investors are taking the discounts on Tesla’s already most popular and lower-priced vehicles as a sign that there’s less demand for the vehicles.
After the bell Wednesday, investment banking firm Canaccord Genuity cut its price target for Tesla from $304 to $275, citing “cosmically bad” public sentiment and a “distraught” shareholder base. The firm still says Tesla is a buy, though.
Tesla’s $7,500 discount feels desperate, and it’s giving investors the ick by Rebecca Bellan originally published on TechCrunch
Tesla started out the month of December by offering Model 3 and Model Y buyers in the U.S. a $3,750 credit if they have their vehicle delivered in December 2022. Now with a week left in the month, the electric vehicle maker has upped that discount to $7,500, according to the company’s website. After the
Tesla’s $7,500 discount feels desperate, and it’s giving investors the ick by Rebecca Bellan originally published on TechCrunch TechCrunch