For me, it’s a miracle that people still have faith that Tesla, with Elon Musk at the helm, will actually be a good investment.
Tesla has launched cheaper versions of two of its most popular cars in the US as it attempts to boost sales in the wake of the expiration of an important US tax credit.
Read: The next Game of Thrones spinoff removes one important element
But the automaker’s shares fell by around 4% as investors were disappointed by the announcement. In the United States, the new versions of its Model Y mid-size sports utility vehicle and Model 3 sedan are priced just $5,000 less than the previous versions.
Facing increasing competition, Tesla has been losing market share as it has been slow to offer new, more affordable vehicles, despite launching a new Model Y version this year.
Read: Roadside assistance and car recovery in Norway – this is what all motorists should know
CEO Elon Musk had previously promised a cheaper car, but abandoned those plans last year to focus on robot taxis and humanoid robots.
“Elon has a knack for getting people to really focus on the future. And today, we see the downside of that,” James Stanley, a macro analyst at StoneX, said of Wall Street’s reaction.
“It’s a lower cost electric car that everyone pretty much saw coming.”
Despite Musk’s emphasis on artificial intelligence enterprises, Tesla is still heavily dependent on its core car manufacturing business, which has been under pressure from several quarters.
The company is facing cuts in the US government’s support for electric cars, competition from Chinese automakers and a consumer protest earlier this year against Musk’s involvement in the Trump administration.
In July, the automaker reported that sales fell by 12% in the second quarter to $22.4 billion – the biggest decline in at least a decade – after deliveries plunged by 14%.
Last week, Tesla was among the automakers that reported record sales of electric cars over the past three months. But analysts said the sales boom was caused by a rush to buy before the expiration of a government subsidy.
Tesla’s car prices for US consumers increased by as much as $7,500 this month after a US tax credit for electric cars expired at the end of September.
Tesla’s executives have recognized that the end of the tax credit for EV buyers in the United States is likely to hurt business.
The recently launched cheaper models, which are aimed in part at offsetting the loss of the EV deduction, will lack certain features found in other Tesla vehicles.
In the US, the cheaper, stripped-down versions of the Model Y and Model 3 will be priced at $39,990 and $36,990, respectively, according to Tesla’s website. They did not immediately appear on the British version of Tesla’s website.
Tesla’s latest major vehicle launch – the Cybertruck – has produced weak results, with US sales of approximately 52,000 units since deliveries began in 2023, according to Cox Automotive.
Read on Sporten: Barcelona legend Jordi Alba is done for Christmas
