SpaceX Chief Engineer Elon Musk answers a question from the press in front of the Crew Dragon that is being prepared for the Demo-2 mission, at SpaceX Headquarters, Thursday, Oct. 10, 2019 in Hawthorne, CA. Photo credit: (NASA/Aubrey Gemignani)
Tesla is slashing the prices of its cars sold in the United States. Rebecca Elliott reports for The Wall Street Journal:
Tesla Inc. TSLA -2.31%decrease; red down pointing triangle cut prices for some of its vehicles sold in the U.S. by nearly 20%, aiming to lure new buyers at a time Wall Street is concerned appetite for the car maker’s vehicles is weakening.
The cuts, which span Tesla’s lineup, are likely to allow some buyers to qualify for a $7,500 U.S. government tax credit.
Elon Musk’s car company slashed the price of its baseline Model Y crossover by almost 20% to $52,990, not including certain fees. That enables buyers to qualify for the tax incentive by putting the vehicle below a $55,000 cap. Tesla’s 14% cut to the price of a high-performance version of its Model 3 sedan, which now costs $53,990, also puts that configuration within the price range needed for buyers to receive the tax benefit.
The Model 3 and Model Y are Tesla’s bestselling vehicles and represent the bulk of the company’s output. The company also lowered prices for its Model S luxury sedans and Model X sport-utility vehicles.
The company didn’t immediately respond to a request for comment.
The price cuts come a week after Tesla cut prices in China by as much as around 13% after deliveries of its Shanghai-made cars plunged in December.
Tesla is facing more competition in the electric-vehicle market as both traditional car companies and newer entrants introduce new models and capture market share.
Last month, Mr. Musk suggested that the higher-interest-rate environment was hurting vehicle demand. Tesla offered discounts to many buyers who agreed to take delivery of vehicles before January to goose sales in a year-end sales push.
Despite offering incentives, Tesla missed its 2022 growth target. It delivered about 1.31 million vehicles last year, up roughly 40% from 2021. The company initially aimed to increase annual vehicle deliveries by 50% or more.
The subdued delivery figures capped a difficult year for Tesla that saw its stock suffer its worst annual performance. The company’s stock fell about 65% in 2022.
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