Tesla Inc. is scheduled to release earnings figures on July 26.
David Paul Morris Tesla Inc. is scheduled to release earnings figures on July 26.
David Paul Morris | Bloomberg | Getty Images
Tesla shares dropped 5% on Friday after the electric car company cut prices on some models in the U.S. and reduced the price for its premium driver assistance software.
The stock closed at $245.01. The stock is still up nearly 100% for the year, after rising 2.7% in the last week. Subscribers pay $99 to $199 per month, depending on whether they’re upgrading from a standard or other premium version.
Tesla is also cutting prices for inventory vehicles in the U.S., including its entry-level Model 3 sedan, luxury Model S sedan and the Model X SUV. The Model S and Model X are also being reduced by about 7% in China. The investigation started after a series of accidents involving Teslas that were believed to have been using driver assistance systems. However, the price cuts on Model S and X upset some prior customers in the U.S. and in China, who took to social media to complain that the lower price hurts the resale value of their cars and that they’re paying higher insurance costs because their car was more expensive.
Meanwhile, Tesla’s Model 3 refresh, officially revealed on Friday, included controversial changes, such as a “stalkless” turn signal. The redesigned Model 3 will require drivers in China and
to press a button to indicate that they are about to make a lane change or turn. The base model Model 3 refresh comes with an approximately 12% higher price tag in China compared to its predecessor.
Also known as the “highland,” the Model 3 refresh includes a longer-range battery. Tesla China says that the Model 3 refresh’s higher-end model can travel as far as 713 km (443 mi) on one charge, while the base version can only travel 606 km (37 miles). The new Model 3 variant also features a number of interior design changes, including a touchscreen that allows passengers in the back to adjust comfort settings and entertainment, along with tweaks to the vehicle’s exterior design, with new colors available.
Due to its pricing, analysts at Bank of America wrote in a note that, “We think the impact of the new Model 3 debut on Chinese EV peers should be manageable considering the sedan’s entry price is much high than consumers’ expectation. “the EUThe analysts said the Model 3’s peers in China include XPeng’s P7, BYD’s Han and Seal and Leapmotor’s C01 electric cars
Considering the increased starting price, initial sales volume for the Model 3 refresh in China may not be as high as previously expected, they said. Still, the analysts remain positive on the outlook for the vehicle’s sales this quarter as consumers have been waiting for the upgrade.
Also this week, Tesla faced reports of new federal probes into the company by the SEC and a Manhattan federal prosecutor about whether it had deliberately misled consumers with its prior EV battery range claims, and improperly used resources to benefit Musk personally.Regarding the use of company resources, Musk on Friday denied reports that Tesla had plans to build him a “glass house” near Austin, Texas.
The Chinese EV market is dominated by BYD and Tesla