Tesla Inc. is offering rare discounts through year’s end on its two top-selling models, an indication that demand is slowing for its electric vehicles.
The Austin, Texas, company started offering a $3,750 incentive on its Model 3 sedan and Model Y SUV on its website earlier this month, but on Wednesday doubled the discount to $7,500 for those who take delivery between now and Dec. 31.
The move comes ahead of a new federal tax credit of up to $7,500 that’s scheduled to take effect Jan. 1. Teslas weren’t eligible for a previous federal tax credit program because the company had reached a limit of 200,000 vehicles sold. Next year’s credits don’t have such a limit.
“This is a sign of demand cracks and not a good sign for Tesla heading into the December year-end,” Wedbush analyst Dan Ives said in an e-mail. “EV competition is increasing across the board, and Tesla is seeing some demand headwinds.”
Lower priced versions of the Models 3 and Y will be eligible for the federal tax credit come January due to limits on vehicle purchase prices outlined in the Inflation Reduction Act.
Without the discounts, the Model 3 starts at just over $48,000 including shipping, while the Y has a starting price of just over $67,000. To be eligible for the federal tax credit, vehicles can’t have a sticker price of over $55,000 for sedans and $80,000 for trucks and SUVs.
Tesla offers a standard driver assistance package called Autopilot in all its new cars today. It also sells additional features in a package marketed as Enhanced Autopilot or Full Self-Driving in the U.S., which costs $15,000 or a $199 a month. The company also allows some owners to access features that have not been fully debugged under its FSD Beta program, and to test these features on public roads.
None of the company’s cars are autonomous yet, and no vehicle maker is selling a driverless car today in the U.S. Tesla CEO Elon Musk told shareholders a self-driving Tesla would capable of a cross-country demo drive without human intervention by the end of 2017, but the company has never completed that demonstration.
The new crashes that were added to NHTSA’s list of investigations this month included a Thanksgiving Day collision that ensnared eight cars after a driver in a 2021 Tesla Model S was moving erratically through traffic lanes on the San Francisco Bay Bridge.
The driver of the Model S, which is Tesla’s premium sedan, claimed that they were using the company’s Full Self Driving features, according to records released by the California Highway Patrol, as CNN first reported.
Another recent crash added to NHTSA’s list involved a 2020 Tesla Model 3, the company’s entry-level sedan.
According to data obtained from NHTSA by CNBC, the agency is looking into at least 41 crashes involving Tesla vehicles where automated features such as automatic emergency braking, or more extensive driver assistance system features included in Autopilot, FSD and FSD Beta were involved.
The records show that 14 of these earlier investigations concern crashes that resulted in fatalities.
The company is also facing consumer lawsuits and federal and state scrutiny over its safety claims and marketing practices. The California DMV has accused Tesla of engaging in false advertising around its driver assistance systems.
