Tesla Inc. TSLA cars could be cheaper if you opt to buy one ahead of the new year.
What Happened: The electric vehicle maker plans to offer a $3,750 credit for U.S. buyers who take delivery of a new Model 3 or Model Y vehicle available in its inventory, information available on its website showed. This incentive scheme will be made available only for the month of December.
Tesla also announced price cuts in China recently amid indications that demand is slowing in the country due to the COVID-19 situation. The company cut prices of its Made-in-China Model 3 and Y vehicles by about 5% in late October and followed it up with an increase in insurance incentives for those buying before Nov. 30.
Local media outlets hinted that more price cuts could be coming as demand did not budge despite the reductions.
The Tesla China website now has a notice that says orders delivered before Dec. 31 stand to enjoy multiple discounts such as new energy vehicle subsidies, point rewards and insurance subsidies.
The Chinese government is set to roll back its EV subsidies by the end of the year.
Why It’s Important: Macroeconomic uncertainties and geopolitical tensions have weighed down on EV makers this year. Chinese startups faced production disruptions due to factory shutdowns as well as parts and components supply shortages.
Added to this, consumer demand has also weakened globally due to a combination of factors, including a rising rate environment and inflationary pressure.
Tesla, which shuttered its Giga Shanghai plant for about a month in the March-April period, has to push hard in the fourth quarter to deliver in line with its long-term growth guidance. CEO Elon Musk has been hinting at an “epic” fourth quarter, and these price cuts and incentives could come in handy to increase volume.
Price Action: Tesla closed Thursday’s session little changed at $194.70, according to Benzinga Pro data.
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