Tesla Inc. (NASDAQ: TSLA) sales in the United States have been staggered primarily because of CEO Elon Musk’s relationship with President Trump and his efforts to cut government spending. Tesla may use a traditional way to boost sales. According to Motor1, the electric vehicle (EV) maker has cut the price of its Model Y by as much as $11,000.
The lower-priced Model Y has dropped some features compared to its predecessor, the Launch Series. The latest version will not offer free Full Self-Driving service, which will cost $8,000 a year. Motor1 reports that the vehicle will be part of the government program that gives buyers a $7,500 tax credit.
Tesla also offers 5.49% financing, below what many banks charge on mid-term loans. To regain market share, Tesla will need to decide whether to add other incentives.
Another reason Tesla may need to increase incentives is the recent flood of used Teslas on the market. One theory about why this has happened is Musk’s relationship with the U.S. president. People who are politically liberal have even started to turn their Teslas in, even at prices well below market. The backlash has even caused people to vandalize dealers and individual cars.
Used Model 3 Teslas, only two years old, are on the used car market for under $25,000. Some of these have been driven less than 25,000 miles. People who buy these will not be candidates to buy a new Tesla, at least in the near future.
Tesla also faces attractive incentives from its competitors. Ford is offering free chargers and installation costs.
Tesla has not had to use incentives as much as many other car companies, but that has started to change.
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