Tesla offers cheaper versions of 2 electric vehicles in bid to win back market share in tough year
By BERNARD CONDON
NEW YORK (AP) — Tesla introduced new, more affordable versions of two of its electric car models on Tuesday in a bid to boost sales, but investors reacted by selling off the company’s stock.
The new Model Y, priced at just under $40,000 with a simplified interior, is being released during a challenging year for Tesla as it looks to attract more customers amidst competition from foreign electric vehicle manufacturers and backlash against Elon Musk.
Despite the new offerings, the stock market response to Tesla’s announcement suggests that the company may face continued challenges.
“Investors were expecting something more innovative, not just a slight update to an existing product,” said analyst Ivan Drury from Edmunds, commenting on the sharp decline in Tesla’s stock price. “It’s doubtful that these new models will meet expectations.”
Tesla also unveiled a more affordable version of its Model 3 priced under $37,000, which drops to under $35,000 for New York residents with a state rebate.
While Tesla has been discussing a lower-priced vehicle for some time, the new “standard” models are still above the promised $25,000 price point. This release comes at a time when customers are expected to delay purchases following the expiration of a $7,500 federal tax credit for electric vehicles.
Following the announcement, Tesla’s stock fell by 4.5% to $443.09 on Tuesday, after a previous day’s increase of over 5% in anticipation of the new model launch.
The new Model Y offers a reduced 321-mile driving range, fewer audio speakers, and a fabric interior instead of microsuede. It also does not include a panoramic glass roof or a second-row touchscreen.
In the $40,000 price range, the Model Y faces competition from electric vehicles like Ford’s Mustang Mach-E, Chevrolet’s Equinox EV, and Hyundai’s Ioniq 5.
The updated Model 3 has also seen reductions in driving range, ambient lighting, and other features.
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