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Tesla Inc TSLA on Friday announced price cuts ranging from 6.4% to 19.7% in the U.S., stirring excitement among its ardent backers on Twitter.
What Happened: The move came on the heels of a sharp reduction announced in China on Jan. 6.
It was precipitated by worries concerning demand slowdown amid the macroeconomic uncertainties and the intent to make the Model Y long-range variant eligible for the federal electric vehicle tax credit.
See Also: Everything You Need To Know About Tesla Stock
Immediately after the announcement, Tesla analysts, investors, users and influencers swung into action and flooded Twitter with their views and thoughts. YouTuber and Tesla influencer Steven Mark Ryan suggested the move could hit other automakers hard.
Another Tesla influencer, going by the handle @TSLAFanMtl, suggested the EV pioneer’s market share might explode with the price cuts.
Former Tesla employee Farzad Mesbahi said, “Tesla going for the throat,” apparently suggesting it was an aggressive move to take on the competition.
Analysts Say Expected Move: Fund manager Ross Gerber termed the move as an “interesting” one. Future Fund’s Gary Black said the price cuts would boost Tesla’s 2023 volumes.
But he said it felt odd that the company did not bring down the Model Y Performance variant’s price to $54,990 to avail of the $7,500 federal EV tax credit.
Black said the move wasn’t surprising after China price cuts and the lack of any sales momentum in the U.S. since Dec. 31 amid the IRA uncertainty. While releasing its vehicle qualification norms for the incentive, the federal agency left the 5-seater variant of Model Y out of the purview of the benefit.
Tesla shares, the analyst said, would recover as investors realized volume impact could offset negative margin impact. Volume growth was more important than margins, he added.
TSLA Price Action: On Friday, Tesla shares closed down 0.94% at $122.40, according to Benzinga Pro data.
Photo: Zigres on Shutterstock
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Image and article originally from www.benzinga.com. Read the original article here.