© Reuters. Demand problem? Tesla (TSLA) offers discounts on Model 3 and Model Y in North America
By Senad Karaahmetovic
Tesla (NASDAQ:) has offered discounts on its Model 3 and Model Y electric vehicles (EVs), fueling concerns it is also experiencing a demand problem.
According to its website, the EV maker is offering a $7,500 credit in the United States and a $5,000 credit in Canada on Model 3 and Model Y vehicles, with the delivery date set before the end of the year. Moreover, Tesla is offering free supercharging for 10,000 miles.
Investors and analysts have been growing increasingly worried that Tesla is seeing weakening demand while the company continues to struggle in ramping up Texas and Berlin factories. Reuters reported today that Tesla’s China head Tom Zhu has been sent to fix production issues in the United States.
The EV maker warned in October that it will very likely fail to hit its delivery target this year. Tesla cut prices in China and United States recently, which prompted some sell-side analysts to cut price targets on lower volumes and CEO Elon Musk’s issues at Twitter.
Deutsche Bank (ETR:) analysts lowered Q4 deliveries estimates for Tesla yesterday, prompting them to cut the price target to $270 from the prior $355.
“Beyond the quarter, we continue to expect challenging headlines around demand softening and associated price cuts, but think the company remains best positioned to weather the current macroeconomic conditions, leveraging price to support volume growth and various cost levers in place to protect margins,” the analysts said in a client note.
Tesla stock hit its new 52-year low yesterday before closing at $137.57, down 0.17% on the day.
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