NEW YORK: Tesla shares declined on Tuesday following the company’s introduction of revamped vehicle models with slightly reduced starting prices.
The electric vehicle manufacturer led by Elon Musk began accepting orders for standard versions of the Model 3 sedan and Model Y midsize SUV priced at approximately $40,000 or less.
These new standard models are priced about $5,000 lower than previous base versions of the same vehicles.
The price reduction comes after the expiration of a federal electric vehicle tax credit worth up to $7,500 per vehicle on September 30.
This tax credit phase-out resulted from comprehensive tax and fiscal legislation supported by President Donald Trump that eliminated initiatives aimed at combating global warming.
Analysts expressed doubt that the latest models would significantly increase Tesla’s sales despite promotional social media posts over the weekend.
Wall Street has been eagerly anticipating brand new vehicle models from Musk that would impress consumers.
CFRA Research analyst Garrett Nelson described the announcement as disappointing for investors who had hoped for new models like the long-awaited Roadster.
He noted that one of the primary reasons behind Tesla’s market share losses is the aging nature of its vehicle portfolio.
Wedbush Securities analyst Dan Ives stated he was relatively disappointed that the new prices are only about $5,000 below prior versions of the Models 3 and Y.
The actual vehicle price will be lower in states like New York where a $2,000 state tax credit applies, reducing the price to $34,900 from $36,990.
However, Tesla’s website estimates the total price in New York at $42,068 when including taxes and fees.
Tesla shares fell 4.1 percent during afternoon trading following the announcements. – AFP