Dec. 22 (Reuters) – Tesla Inc (TSLA.O) Shares fell Thursday after the luxury electric car maker began offering discounts of $7,500 on Model 3 and Model Y vehicles delivered in February. United State This month, it raised concerns that the company is facing weak demand as economies slow.
On December 1, Tesla began offering a $3,750 “credit” on Model 3 and Model Y vehicles delivered before the end of the year. It raised the credit to $7,500 on Wednesday. It also recently began offering a free 10,000-mile (16,093 km) supercharge for vehicles delivered in December.
The rare cuts follow a series of price increases over the past two years by Tesla, which it blamed on supply chain disruptions and inflation.
Tesla shares closed down 8.9%, heading for their worst month ever as concerns grew about slumping demand for electric cars and distraction from CEO Elon Musk from Twitter, which he bought in October.
Tesla underperformed the broader market, which fell as data showing a resilient economy fueled concerns about the Federal Reserve’s path in raising interest rates.
Musk said Thursday that he expects the economy to be in a “serious recession” in 2023 and that demand for expensive goods will decline.
Analysts lowered their estimates for Tesla vehicle deliveries for the current quarter, reflecting slowing growth in key markets such as the United States and China.
“The fact that they seem to be lowering prices to increase delivery volumes does not increase confidence, especially at a time when we are seeing increased competition,” said Craig Irwin, senior analyst at ROTH Capital Partners.
As the US government plans to introduce tax credits to stimulate demand for electric vehicles starting in January, Tesla customers have held purchases until the incentives take effect, which has hit demand.
The latest discount came just days after the US Treasury delayed restrictions on electric vehicle incentives until March, meaning Tesla and other US-made electric vehicles will likely qualify for at least the full $7,500 stimulus from January to March.
Tesla is also offering a $5,000 Canada credit on Model 3 and Model Y delivered before the end of the year. The automaker has also given a 6,000 yuan ($860) discount on some models in China until the end of 2022.
Tesla said in October it would miss its car delivery target this year, but played down concerns about demand after its revenue missed Wall Street estimates.
($1 = 6.9761 yuan)
Additional reporting by Hyunju Jin in San Francisco, Javier Singh Shekhawat, Maria Ponizeth and Nivedita Balu in Bengaluru; Editing by Tom Hogg, Emilia Sithole Mataris, Shonak Dasgupta and Leslie Adler
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