By Dana Hull and Ed Ludlow | Bloomberg
Tesla shares pared a steep drop in intraday trading after Chief Executive Officer Elon Musk denied a report saying the carmaker had canceled plans for a less-expensive vehicle.
The stock fell as much as 6.2% on Friday after Reuters said Tesla was abandoning the project, citing anonymous sources and company messages it had reviewed. Shares were down 3.2% as of 11:54 a.m. Friday in New York.
“Reuters is lying,” Musk wrote on X, his social media service.
Musk first teased a $25,000 model during an event the company staged in September 2020. The CEO said at that time that a series of innovations Tesla was working on gave him confidence the company could make an electric vehicle at that price point within about three years.
The lack of a lower-price model in Tesla’s lineup more than three years later is proving costly. China’s BYD Co., which offers several much cheaper EVs, outsold the Austin-based company in the fourth quarter of last year. This week, Tesla reported its first drop in quarterly vehicle deliveries since the early days of the global pandemic.
During Tesla’s most recent earnings call in January, Musk said Tesla was “very far along” in making a cheaper car, which has been slated to start production toward the end of next year.
He also touted a new “revolutionary manufacturing system,” calling it “far more advanced than any automotive manufacturing system in the world, by a significant margin.”
SUVs get price slash
Tesla, meanwhile, is slashing prices of its best-selling vehicle in a bid to clear its biggest-ever stockpile.
The company is marking down Model Y sport utility vehicles it has in inventory, with the rear-wheel drive version going for $4,600 less than the cost to custom order the sport utility vehicle. Long-range and performance Model Ys are discounted by at least $5,000.
Tesla is offering the deals after producing 46,561 more vehicles than it delivered in the first quarter, adding more cars to inventory than ever before. While the company blamed its global sales decline in part on changing over its California plant to make the upgraded Model 3 sedan and shutdowns of its factory in Germany, some analysts aren’t buying it.
