(Bloomberg) — Tesla Inc. is offering U.S. consumers $7,500 to take delivery of its two highest-volume models before the end of the year, adding to indications the automaker is struggling with demand.
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The discount on new Model 3 sedans and Model Y sport-utility vehicles is double what the company was offering earlier this month. It reflects an anticipated change in the amount of tax credit some consumers will be eligible for early next year.
It is highly unusual for Tesla to offer such perks, as Elon Musk has had a no-rebate policy for years. The company also backed away from its chief executive’s insistence against traditional advertising spending last month by promoting its products on a local TV shopping channel in China. Tesla also cut prices and production in that market this quarter.
Tesla shares fell as much as 3.8% after regular trading opened on Thursday. The stock is down 39% since Musk ended his Twitter Inc. deal in late October and 61% for the year. Ten analysts have cut their price targets since last week, according to data compiled by Bloomberg.
Read more: Tesla is not having the epic end of the year Elon Musk predicted
Tesla vehicles would have had to be in line for tax credits of $3,750 starting in January as part of the Inflation Reduction Act’s changes to federal incentives for electric vehicles. That changed this week when the US Treasury Department announced it was delaying guidance on new battery content requirements. Deferring those restrictions will likely make some EV models eligible for a full $7,500 credit early next year.
However, Tesla’s rebates aren’t entirely consistent with the new US tax credits. The company doesn’t appear to limit its incentive to consumers with certain incomes or vehicles in certain price ranges, as the Inflation Reduction Act does. The automaker is also offering 10,000 miles of free use of its Superchargers.
While Musk tweeted earlier this month that Tesla is doing better than ever, the company has already said it plans to hit its goal of increasing shipments by 50% this year. The automaker’s output exceeded deliveries by more than 22,000 vehicles during the three months ending in September, and it prepared investors for another discrepancy this quarter.
Musk has repeatedly criticized the Federal Reserve for raising interest rates and has pointed to difficulties in Chinese real estate and European energy markets. His sometimes conspiratorial and often politically charged tweets have also turned off some consumers.
(Updates with stock trading in fourth paragraph.)
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