Tesla Inc.of TSLA The US price cut announced on Friday was a polarizing decision as stakeholders including investors, analysts, advocates and customers took opposing positions on its impact.
What happened: A customer who recently bought a Tesla car is furious at the quickness. To better understand their dissatisfaction, it is enough to look at the company’s announced price reduction percentage.
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Prices for various Tesla models have been cut between 6.4% and 19.7%.the largest cut Model Y A long-range version with dual-motor all-wheel drive to stay below the ceiling for eligibility for the $7,500 federal electric vehicle subsidy set by the Internal Revenue Service.
Anecdotal evidence from a recent Tesla buyer echoed the feeling of being duped: car enthusiast Marianne Simmons, who delivered a Model Y Performance for $72,440 before tax in September , whined that it was missing out on price cuts, Bloomberg reported.
“I feel like I’ve been deceived. I feel like I’ve been used as a consumer,” he said.
Tagged CEO Musk, she tweeted. We need some kind of consumer protection law for that. “
Another customer, who goes by the Twitter name Brian, said Tesla and Musk erased $10,000 worth of money from his 4-week-old Tesla overnight. “Last night I convinced a friend to cancel the pre-order,” he said.
“It’s 18 more times before we feel sane.”
Meanwhile, a Tesla influencer with the Twitter handle @NYplaid had a way out of the predicament. A simple fix proposed was to offer free lifetime supercharging to anyone who recently purchased a new Tesla directly from the company in 2022.
Ivan Drury, director of insights at Edmunds.com, said in a Bloomberg report that anyone who bought a Tesla recently would feel the immediate impact and want to lease it. “For existing owners, it’s a kick in the teeth,” he was quoted as saying. Drury believes that new car price cuts will soon impact used car prices, which will drop further.
Reuters reported that in late December, Tesla’s average used car price was $55,754 in November, down 17% from its July high of $67,297. The decline was steeper than the 4% drop in the used car market as a whole.
Important reasons: The price cut was in line with Musk’s recent assertion that volume is more important than margin. Tesla faces demand problems due to consumer preference for cheaper EV models from rivals and a general slowdown in adoption amid a soft economic environment.
Musk’s prevalence on Twitter has already alienated even die-hard Tesla fans. It remains to be seen whether the anomalous price cuts will further erode the once-enviable mindshare EV makers have among their customers.
Price action: Tesla ended Friday’s session down 0.94% at $122.40, according to Benzinga Pro data.
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