Tesla has had an eventful week, with both ups and downs for the electric vehicle maker. On Friday, September 1st, Tesla’s stock dropped 5% on news that the company was cutting prices on some models in the U.S. and reducing the cost of its Full Self-Driving software.
Despite the stock dip, Tesla shares are still up almost 100% for the year after gaining 2.7% this week. The recent volatility comes amidst pricing adjustments, unveiling of new models, and reports of federal investigations into the automaker.
In a surprising move, Tesla cut prices on its premium Full Self-Driving software by $3,000 in the U.S., lowering the upfront cost from $15,000 to $12,000. Monthly subscription rates of $99-$199 remain unchanged. The discount follows reports that the National Highway Traffic Safety Administration is wrapping up a probe into safety issues with Tesla’s driver assistance features after crashes involving stationary emergency vehicles.
Additionally, Tesla reduced prices on inventory vehicles including the Model 3 sedan, Model S, and Model X in the U.S. market. In China, prices dropped around 7% for the Model S and X. The lowered Model X price now makes it eligible for a $7,500 U.S. tax credit. However, some prior Model S and X owners complained the cuts hurt resale values and raised insurance costs.
The price cuts coincided with the launch of Tesla’s revamped Model 3 in China on Friday. The upgraded “Highland” Model 3 gets increased range and new comfort features but also sees a higher starting price, disappointing some consumers. Initial sales volumes may suffer but analysts remain optimistic about demand.
Meanwhile, Tesla faces new federal probes from the SEC and a New York prosecutor regarding potentially misleading battery range claims and improper use of resources to benefit CEO Elon Musk. On Friday, Musk denied reports Tesla had plans to build him a lavish “glass house” in Texas.
The swirling mix of stock declines, price cuts, model launches, and federal investigations sums up Tesla’s whirlwind week. With vigorous demand, legal scrutiny, and unpredictable leadership, Tesla continues to make headlines as the EV pioneer navigates an ever-changing market.
