Tesla (NASDAQ:TSLA) stock isn’t doing so hot today as the company prepares to cut the price of the Model Y.
The Tesla Model Y is dropping in price by $13,000 in the United States. This reduction has the Long Range version of the electric vehicle (EV) starting at $52,990 and the Performance model starting at $56,990. These price cuts come after similar reductions were made by Tesla in China to boost sales.
It looks like a sales boost is also the goal of these U.S. price cuts. That makes sense, as markets have been dealing with reduced consumer spending lately as inflation weighs on the economy. A price cut could help boost Tesla deliveries to make up for that decline.
Tesla Model Y Tax Cut
To go along with this news, the price cut for the Tesla Model Y also makes it eligible for the federal tax credit. The credit comes in at $7,500 and “will be available through March.” Tesla is likely reducing the price of the Model Y in part to take advantage of this tax credit incentive.
Despite this news, investors aren’t excited about the cuts with heavy trading pulling shares of Tesla down. As of this writing, more than 121 million shares of TSLA stock have changed hands. That’s above the daily average trading volume of about 118 million shares.
TSLA stock is down 2.6% as of Friday afternoon.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.