Tesla cuts the price of its cars by 20% to support falling sales

Tesla is slashing the prices of its EVs across the board to support falling sales — cutting the list price of its most expensive models by more than $20,000, even as budget models are down as much as 20%.

The Model S Plaid, which previously cost $135,990, will now cost the consumer $114,990 — a 15% discount on $21,000.

Tesla also cut the price of its Model X Plaid from $138,990 to $119,990 – a 14% reduction.

Those on a tight budget who dreamed of owning a Tesla could splurge on the Model Y, which was slashed by 20% to $52,990 from $65,990.

The Y Performance model, which previously cost $69,990, will now set you back $56,990.

The new data is reported by Bloomberg News.

The price changes for Model 3 sedans and some Model Y SUVs are significant as buyers can now claim a $7,500 tax credit on electric vehicles.

Under the old pricing plan, Model Y buyers were not eligible for the tax credit because the price was over the $55,000 cap.

Tesla CEO Elon Musk was reportedly upset when the Biden administration issued directives last year that made Model Y buyers ineligible for a tax break because the car didn’t weigh enough to be considered an SUV.

Thus, the Model Y is subject to the $55,000 price cap that applies to sedans, instead of the $80,000 threshold for SUVs.

Tesla notes on its website that some customers are now eligible for a $7,500 federal tax credit for vehicles delivered before March.

Tesla’s price cuts for its US models followed similar price cuts in Germany, the UK and France.

The electric car maker has also cut prices significantly in its Chinese market for the second time in three months.

Tesla shares fell nearly 5% to $117.61 in early trading on Friday.

Tesla’s share price fell more than 64% last year as high inflation curbed demand for its electric vehicles. The company is one of many technology companies that have been hit hard by the unfavorable economic climate.

Tesla investors are especially annoyed by Musk, who seems preoccupied in recent months with a $44 billion acquisition of his beloved social network Twitter.

Musk is due to appear in court next week in a civil lawsuit filed by Tesla investors who accused him of making false and misleading statements on Twitter in 2018 that artificially inflated the company’s share price.

Musk is due to testify in court about his behind-the-scenes efforts in 2018 to raise funding to buy out the electric car maker.

The Tesla shareholders who filed the lawsuit are seeking damages in the amount of billions of dollars.