Tesla plans to unveil its Model Y crossover on March 14, just weeks after it cut prices on its other vehicles. Shares fell as investors worry if demand is falling.
Tesla's onslaught of announcements is starting to make analysts wonder if customers are losing interest in its cars.
On Thursday, Tesla unveiled its long-awaited $35,000 Model 3, cut prices on upgrades to its autopilot automated driver assistance system and made significant price cuts to its Model S and Model X vehicles after saying it will only sell its vehicles online to reduce costs. Its shares fell nearly 8 percent Friday and slid by another 2.5 percent in morning trading Monday.
"A Model Y announcement so shortly after the $35k [Model 3] suggests that consumer reaction toward the $35k Model 3 may not have been as strong as the company had hoped," Spak said."We believe there has been a fall- off in U.S. demand and softer than expected demand in Europe/China." The price cuts on Tesla's three models, the X, S and 3, backs up the idea that demand has softened, he added.
High prices weren't as much of an issue when Tesla was making premium electric vehicles, such as the Model S and Model X. But the Model 3 is meant for the mass market. Up through the end of 2018, Tesla's sales were bolstered by a federal tax credit of $7,500 for electric car buyers. But that credit was halved starting Jan. 1, and some have questioned whether that will hurt demand.
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