A Tesla Model 3 vehicle on an auto rack in front of a store in Rocklin, California on July 21, 2021.
David Paul Morris | Bloomberg | Getty Images
You’re here Shares fell 5% on Friday after the electric car maker slashed prices for some models in the United States and slashed the price of its high-end driver assistance software.
The stock closed at $245.01. It is still up almost 100% this year after gaining 2.7% over the week.
While the CEO of Tesla Elon Musk said in the past that the price of Tesla’s premium driver assistance option, marketed as Fully Self-Driving Software, would only increase, the company slashed the price by $3,000 from $15,000 in the US for customers who purchase it upfront rather than through a monthly subscription. Subscribers pay between $99 and $199 per month, depending on whether they are upgrading from a standard version or another premium version.
Tesla is also slashing the prices of in-stock vehicles in the United States, including its entry-level Model 3 sedan, its Model S luxury sedan, and the Model X SUV. In China, Tesla is slashing the price of the Model S and Model X by about 7%.
The FSD rebate follows reports that the National Highway Traffic Safety Administration is nearing completion of a years-long investigation into possible safety flaws in Tesla’s driver assistance systems. The investigation began after a series of crashes involving stationary emergency vehicles by Tesla drivers suspected of using driver assistance features.
The price drop of some Model X cars in the United States makes the SUV eligible for a $7,500 tax break for qualified buyers. However, the price cuts on the Model S and X have upset some former customers in the United States and China, who have complained on social media that the price drop is hurting the resale value of their cars and that they pay higher insurance costs because their car was more expensive.
Meanwhile, Tesla’s Model 3 update, officially revealed on Friday, included controversial changes, such as a “stemless” turn signal. Redesigned Model 3 Drivers in China And the EU will need to press a button on the steering wheel to indicate it’s about to change lanes or turn, and will be able to use park, reverse, neutral and drive controls on the touchscreen instead of the left joystick. The base Model 3 refresh is priced around 12% higher in China than its predecessor.
Also known as ‘Highland’, the refreshed Model 3 features a longer-range battery. Tesla China’s website says the top-end version of the refreshed Model 3 can travel up to 713 km (443 miles) on a single charge and the base model can travel 606 km (377 miles). The new Model 3 variant also features several design changes, including a touchscreen that allows rear passengers to adjust comfort and entertainment settings, as well as changes to the vehicle’s exterior design, with new colors available.
Due to its price, Bank of America analysts wrote in a note: “We believe the impact of the new Model 3’s debut on Chinese EV competitors should be manageable given that the entry price of the sedan far exceeds consumer expectations. »
Analysts said Model 3 peers in China include XPeng’s P7 electric cars, BYD’s Han and Seal and Leapmotor’s C01 electric cars..
Considering the increased starting price, the initial sales volume of the refreshed Model 3 in China may not be as high as expected, they said. Still, analysts remain positive about the vehicle’s sales prospects this quarter as consumers await the upgrade.
Also this week, Tesla faced reports of new federal investigations into the company by the U.S. Securities and Exchange Commission and a Manhattan federal prosecutor into whether it deliberately misled consumers with its previous claims about electric vehicle battery range, and misused resources for the benefit of Musk personally.
Regarding the use of company resources, Musk on Friday denied reports that Tesla was planning to build him a “glass house” near Austin, Texas.
Fixed: The Model 3 refresh has a haptic turn signal button on the “stemless” steering wheel and other controls on the touchscreen.