Tesla doubles discounts on vehicles

Tesla is offering $7,500 discounts on Model 3 and Model Y electric vehicles delivered in the United States this month, its website showed on Wednesday, amid concerns the automaker is facing softening demand as economies slow.

That is up from the $3,750 discount it has offered on Model 3 and Model Y vehicles delivered before the end of the year. It has also recently started offering free supercharging for 10,000 miles (16,093 kms) for vehicles delivered in December.

The latest discount came just days after the U.S. Treasury Department delayed restrictions on EV incentives until March, meaning Tesla and other U.S.-made electric vehicles will be likely to qualify for the full $7,500 in incentives starting January.

Customers had canceled their orders and held off their purchases until the new credits take effect in January, weighing on Tesla demand.

Analysts also worry that rising interest rates and Chief Executive Elon Musk’s Twitter distraction could hurt the Tesla brand and sales.

“The fact they seem to be cutting price to increase deliveries volumes doesn’t raise confidence, particularly at a time where we see increasing competition,” Craig Irwin, a senior analyst at ROTH Capital Partners, said.

The rare discounts follow a series of price hikes over the past couple of years by the automaker, which blamed supply chain disruption and inflation.

Tesla’s shares, which have lost over two-thirds of their value so far this year, were down 5% at $130.60 on Thursday.

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

Tesla said in October it would miss its vehicle delivery target this year, but downplayed concerns about demand after its revenue missed Wall Street estimates.

($1 = 6.9761 yuan)

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