Shares of Tesla Inc. were under pressure in early trading on Friday after the electic-car maker announced price cuts for its Model 3 and Model Y cars, with discounts in some cases of nearly 20%, as the company battles demand troubles.
Prices cuts were posted to the company’s website late Thursday in both in the U.S., with reports prices were also dropped across Europe. A standard range rear-wheel drive Model 3 now lists a price of $43,990 from a prior $46,990, which represents a 6.4% drop. The higher-end Model 3 Performance was discounted by 14.3%, to $53,990 from $62,990.
The price for a long range all-wheel drive Model Y was dropped to $52,990 from $65,990, a 19.7% discount, while the Model Y performance model was cut by 18.6% to $56,990 from $69,990.
Prices for some models also reportedly fell in Germany and several other European countries.
Shares of Tesla dropped 4.6% in early premarket trading.
Like many automakers, Tesla TSLA, +0.28% is dealing with tough economies all over. The company cut prices in China to start 2023, following similar moves in October in a bid to boost sales in the country that struggled with COVID lockdowns last year.
But investors grew notably impatient with Tesla in 2022. Shares are up 0.3% for the new year so far after a punishing 2022, in which the automaker suffered its worst month, quarter and year on record to finish 2022, as it missed fourth-quarter delivery expectations.
Musk himself also sold shares in 2022, a year that saw him draw criticism for his takeover of social media site Twitter that some say distracted him from his duties at Tesla.
Tesla’s latest U.S. price cuts may have also been designed to help buyers qualify for a $7,500 tax credit on new electric cars and plug-in hybrids. Those rebates are restricted to SUVs, and vans with manufacturer’s suggested retail prices of up to $80,000 and cars up to $55,000.
The new price cuts means the Model 3 Performance and the long-range all wheel drive Model Y now qualify for those tax breaks.