January 27, 2023

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Tesla doubles discounts on base vehicles to $7,500 in the US

Dec. 22 (Reuters) – Tesla Inc (TSLA.O) Offers discounts of $7,500 on Model 3 and Model Y electric vehicles delivered at United State This month, its website showed on Wednesday, amid fears the automaker could face weak demand as economies slow.

That’s up from the $3,750 discount it offered on Model 3 and Model Y vehicles delivered before the end of the year. It also recently began offering a free 10,000 mile (16,093 km) supercharge for vehicles delivered in December.

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 cars will likely qualify for the full $7,500 stimulus from January.

Customers canceled their orders and held their purchases until the new credits took effect in January, which affected Tesla’s order.

Analysts are also concerned that rising interest rates and CEO Elon Musk’s distraction on Twitter could hurt the Tesla brand and its sales.

A Tesla Model 3 is seen in a showroom in Los Angeles, California, US, January 12, 2018. REUTERS/Lucy Nicholson

“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.

The rare cuts follow a series of price increases over the past two years by the automaker, which it blamed on supply chain disruptions and inflation.

Tesla shares, which have lost more than two-thirds of their value so far this year, fell 5% to $130.60 Thursday.

Tesla is also offering a $5,000 Canada credit on Model 3 and Model Y delivered before the end of the year. The US automaker has also given a 6,000 yuan ($860) discount on some models in China until the end of 2022.

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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 Ponizath and Nivedita Balu in Bengaluru; Editing by Tom Hogg, Emilia Sithole Mataris and Shonak Dasgupta

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