- Tesla was down as much as 6.7 percent Monday, as the Nasdaq Composite Index was down about 1 percent.
- The stock fell after reports that Tesla cut prices in China on its Model 3 car and its decision to make up the difference of a tax credit if U.S. customers were made ineligible due to the company’s delayed production.
- Customers had been concerned that they would miss the deadline for a tax credit on electric vehicles after Tesla’s production problems greatly delayed delivery times.
Tesla fell as much as 6.7 percent Monday after the company cut prices in China and said it would pay U.S. customers who missed a tax credit deadline due to the company’s production delays. The Nasdaq Composite Index was down about 1 percent on Monday morning.
CEO Elon Musk tweeted Saturday that Tesla would make sure customers weren’t faulted for the tax credit they missed out on due to Tesla’s production delays. The Republican-controlled U.S. Congress agreed to phase out tax credits for people who buy electric vehicles. Under the new policy, the tax credit would be reduced by 50 percent every six months until it is phased out completely.
Customers who had yet to receive the cars they ordered from Tesla took to social media to complain about the lack of communication from the company, worried about getting their cars before the $7,500 tax credit was reduced by half on Jan. 1. In response to one tweet, Musk tweeted, “If Tesla committed delivery & customer made good faith efforts to receive before year end, Tesla will cover the tax credit difference.”
Tesla also recently cut prices for some of its Model 3 cars in China by up to 7.6 percent, according to the Chinese version of its website. Tesla has adjusted prices in China two other times in the past two months. The company said it was “absorbing a significant part of the tariff to help make cars more affordable for customers in China,” when it slashed prices of the Model X and Model S cars by 12 to 26 percent.
It again cut prices on its Model S and Model X cars earlier this month after China’s finance ministry effectively lowered the cost of importing the cars from the U.S. by suspending additional tariffs on U.S.-made vehicles and auto parts for the first three months of 2019.
— Reuters contributed to this report.
Tesla Inc. shares were trading at $300.82 per share on Monday morning, down $18.95 (-5.93%). Year-to-date, TSLA has declined -3.38%, versus a -10.23% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of CNBC.