Tesla Shares Plummet by 5% Following Price Reductions and Model 3 Upgrades

Investor concerns mount as Tesla shares plummet by 5% in response to price reductions and Model 3 upgrades.

On a tumultuous Friday, Tesla, the renowned electric car manufacturer, experienced a 5% drop in its stock value. This sudden decline followed the company’s strategic decision to reduce prices on select models within the United States and to slash the price of its premium driver assistance software.

Tesla’s stock ended the day at $245.01, although it had surged nearly 100% throughout the year, gaining an additional 2.7% during the preceding week. The notable price reduction was specifically directed at the premium driver assistance feature, commonly known as Full Self-Driving (FSD) software, which Tesla’s CEO, Elon Musk, had previously insisted would only see price increases. Remarkably, Tesla chose to cut the FSD software’s price by $3,000 in the U.S. for customers opting for upfront purchases, as opposed to monthly subscriptions ranging from $99 to $199, contingent on whether they were upgrading from a standard or premium version.

Simultaneously, Tesla initiated price cuts for inventory vehicles within the U.S., encompassing the entry-level Model 3 sedan, the luxury Model S sedan, and the Model X SUV. In China, Tesla also reduced the prices of the Model S and Model X by approximately 7%.

These price adjustments coincided with reports indicating that the National Highway Traffic Safety Administration (NHTSA) was nearing the completion of an extensive investigation into potential safety defects associated with Tesla’s driver assistance systems. This investigation was prompted by a series of accidents involving Tesla drivers using driver assistance features that resulted in collisions with stationary first responder vehicles.

Intriguingly, the price reduction for certain Model X vehicles in the U.S. rendered the SUV eligible for a $7,500 tax incentive for qualified buyers. Nonetheless, some Tesla customers in both the U.S. and China expressed discontent on social media, asserting that the price cuts negatively impacted the resale value of their vehicles and led to higher insurance premiums due to the initial higher purchase price.

Furthermore, Tesla unveiled its Model 3 refresh, which introduced several controversial changes, including a “stalkless” turn signal. In this redesigned Model 3, drivers in China and the European Union are required to use a button on the steering wheel to indicate lane changes or turns. The vehicle’s park, reverse, neutral, and drive controls have been relocated to the touchscreen, eliminating the traditional left-side stalk. Notably, the base Model 3 refresh in China commands a price approximately 12% higher than its predecessor.

Referred to as the “highland,” the Model 3 refresh boasts an extended-range battery, with the higher-end version capable of traveling up to 713 km (443 miles) on a single charge, while the base model offers a range of 606 km (377 miles). This iteration also features various design modifications, including a touchscreen for rear passengers to adjust comfort settings and entertainment, as well as alterations to the vehicle’s exterior design with new color options.

Analyzing the pricing changes, Bank of America analysts remarked that the impact of the new Model 3 debut on Chinese EV competitors should be manageable, given that the sedan’s entry price exceeded consumer expectations. They identified Tesla’s Model 3 peers in China as XPeng’s P7, BYD’s Han and Seal, and Leapmotor’s C01 electric cars. However, they cautioned that the increased starting price might lead to lower initial sales volumes in China than previously anticipated.

In addition to these developments, Tesla encountered reports of new federal investigations by the U.S. Securities and Exchange Commission (SEC) and a Manhattan federal prosecutor. These investigations centered on whether Tesla had intentionally misled consumers regarding its previous electric vehicle battery range claims and whether company resources were improperly used for the personal benefit of Elon Musk, allegations that Musk vehemently denied on Friday.

Tesla’s stock drop, pricing adjustments, and ongoing investigations have left the electric car company at a critical juncture, with investors and consumers closely watching how these developments will impact its future prospects.

Key Points:

1. Tesla’s Stock Price Drops by 5%: Tesla’s shares experienced a 5% decline in value after the company announced price reductions on select models and modifications to its Model 3 lineup.
2. Price Cut on Full Self-Driving Software: Tesla unexpectedly reduced the cost of its premium driver assistance software, known as Full Self-Driving (FSD), by $3,000 in the U.S. for upfront buyers, deviating from CEO Elon Musk‘s prior commitment to increasing its price.
3. Inventory Vehicle Price Reductions: Tesla also lowered prices on its inventory vehicles in the U.S., impacting the entry-level Model 3, the luxury Model S, and the Model X SUV. In China, the Model S and Model X saw a 7% price reduction.
4. NHTSA Investigation: The price cut on FSD coincided with an ongoing investigation by the National Highway Traffic Safety Administration (NHTSA) into potential safety issues related to Tesla’s driver assistance systems. The investigation was initiated following a series of accidents involving Tesla vehicles and stationary emergency response vehicles.
5. Tax Break Eligibility for Model X: The reduced prices on certain Model X vehicles in the U.S. make them eligible for a $7,500 tax incentive for qualified buyers. However, this price adjustment upset some existing Tesla owners who are concerned about the impact on their car’s resale value and increased insurance costs.

1. Controversial Model 3 Refresh: Tesla unveiled a refreshed Model 3, featuring a “stalkless” turn signal. In this updated version, drivers in China and the EU must use a touchscreen button to indicate lane changes or turns, replacing the traditional stalk. The new Model 3 comes with a higher price tag in China but offers a longer-range battery and various design changes, including improved passenger comfort and entertainment features.
2. Bank of America Analysts’ Perspective: Bank of America analysts suggest that the impact of the Model 3 refresh on Chinese electric vehicle (EV) competitors should be manageable due to the sedan’s higher entry price compared to consumer expectations. They note that initial sales volume in China may not be as high as anticipated but remain optimistic about the vehicle’s sales prospects for the quarter.
3. Federal Probes: Tesla faced reports of new federal investigations by the U.S. Securities and Exchange Commission (SEC) and a Manhattan federal prosecutor. These investigations focus on whether the company deliberately misled consumers with prior EV battery range claims and whether it improperly utilized resources for Elon Musk’s personal benefit.
4. Musk Denies “Glass House” Plans: In response to reports about Tesla building him a “glass house” near Austin, Texas, Elon Musk denied any such plans, further adding to the scrutiny surrounding the company’s use of resources.

How Long Does It Take To Charge a Tesla

Charging Speed Depends on the Charger Type

The time it takes to charge your Tesla vehicle primarily depends on the type of charger you use. Tesla offers three main charging options

1. Level 1 Charging (Standard Household Outlet): This is the slowest charging option and provides about 2-5 miles of range per hour of charging. A full charge can take up to several days, making it suitable for overnight charging at home.
2. Level 2 Charging (Wall Connector or Public Chargers): Level 2 chargers are significantly faster than standard household outlets. They typically provide around 25-30 miles of range per hour, reducing the full charge time to 6-12 hours, depending on your Tesla model.
3. Superchargers: Tesla’s Supercharger network is the fastest option, offering up to 170 miles of range in as little as 30 minutes. Superchargers are strategically located along highways, making long-distance travel convenient.

Tesla Model Matters

The time it takes to charge a Tesla also varies depending on the specific model you own. Tesla’s lineup includes different battery sizes and ranges, and this impacts the charging duration. For example

• The Tesla Model 3 Standard Range Plus has a smaller battery and typically charges faster than the Model S Long Range, which has a larger battery.
• The Model Y Dual Motor Long Range might take longer to charge compared to the Model 3, even if they both use the same charging infrastructure.

Understanding your vehicle’s battery capacity and the charging infrastructure available to you will help you estimate the time needed for a full charge accurately.

Factors Affecting Charging Times

Several factors can influence the time it takes to charge your Tesla

• State of Charge: Charging from a low battery percentage to full typically takes longer than topping up a partially charged battery.
• Charger Power Output: The charging power of the station you use matters. Superchargers provide higher power outputs, reducing charging times significantly.
• Temperature: Extremely hot or cold weather conditions can affect charging speeds. Tesla vehicles perform best when charging in moderate temperatures.
• Battery Health: The condition of your Tesla’s battery also plays a role. An older or degraded battery might charge slower than a brand-new one.
• Charging Etiquette: Busy Supercharger stations may require you to wait in line, impacting your overall charging time.

In conclusion, the time it takes to charge a Tesla car can vary widely based on charger type, Tesla model, and various external factors. Understanding these factors and planning your charging accordingly can help ensure you always have the range you need for your journeys. Whether you’re charging at home, using a Level 2 charger, or taking advantage of the Supercharger network, Tesla makes it convenient to keep your electric vehicle powered up.