Due to lagging sales and falling stock prices, Tesla Inc. drastically reduced pricing on a number of its electric vehicle models on Friday.
This allowed some of its models to qualify for a new federal tax credit, which may help boost consumer interest.
For some versions of the Model Y SUV, its best-selling product, the business reduced pricing in the United States by about 20%.
The Model Y’s eligibility for the $7,500 U.S. electric car tax credit, which will be offered through March, will increase due to this drop.
Additionally, it decreased the base price of the Model 3 by around 6%, making it the least-priced model.
The drastic price reductions did little to appease investors, as Tesla shares fell around 4% in early Friday trading.
The stock has lost more than 65% of its value since the year’s beginning. Many investors worry that the sales slump will continue and are troubled by Elon Musk’s erratic conduct and the diversions that resulted from his $44 billion acquisition of Twitter.
In a letter to investors, Citi’s Itay Michaeli said that Tesla looks to be emphasizing sales volume over price, which could impact its profit margins in the short term.