Can Tesla Get Back Sales With Price Cuts?

By Douglas A. McIntyre Published Apr 11, 9:15AM EDT

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As Tesla Inc. (NASDAQ: TSLA) sales in the United States falter, it may rely on incentives to boost sales.
Will that be good enough for the leading EV maker to regain market share?

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Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) 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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.