Tesla shook up the auto industry Friday, unveiling its upgraded Model 3 in China and cutting prices by nearly 20% on its higher-end vehicles, the Model S and Model X, in the U.S. TSLA tumbled Friday.
On Friday, Tesla removed its standard range Model S and Model X versions in the U.S. and dropped the price of the Model X all-wheel drive version below $80,000. This now makes the Model X eligible for the federal $7,500 tax credit under the Inflation Reduction Act (IRA).
Tesla stock fell 5% to 244.97 Friday during market trade. On Thursday, TSLA gained 0.5% to 258.08.
Tesla whittled its price on the Model S long range version to $74,990, down from the previous $88,490. The company cut the price on the Model S Plaid trim package by 17% to $89,990. Meanwhile, the Model X long range version has a price of $79,990, down from $98,490.
Tesla's Model X website page now carries a banner proclaiming it is eligible for the $7,500 tax credit. This would bring the price of an all-wheel drive Model X to $72,490 before local or state incentives.
As of Friday morning, the Internal Revenue Service (IRS) has not yet confirmed the change on its site. The IRS currently maintains that all Model 3 and Model Y vehicles qualify for the $7,500 tax credit.
Tesla has also done away with its shorter-range versions of its Model S and Model X vehicles. The company on Aug. 14 launched new base versions of the vehicles, slashing the U.S. price tag on its base luxury electric vehicles by $10,000.
Tesla also reduced the price of Full-Self Driving (FSD) option in the U.S. to $12,000, down from $15,000. This means customers who order a new Tesla vehicle can now add-on the FSD option and pay $12,000 instead of the previous $15,000.
The U.S. price cuts on the Model S and Model X come as Tesla unveiled its upgraded Model 3 vehicle in China Friday. The global EV giant is also seemingly moving closer to launching its highly anticipated Cybertruck.
Tesla Stock This Week
Before Friday's slip, Tesla stock added 1.2% to end Thursday at 258.08. That left shares perched at their 50-day moving average. A move above Thursday's high of 261.18 could offer an early entry for aggressive investors.
Tesla has forged a new base with a proper buy point at 299.29, according to MarketSmith.
Tesla stock ended the week up 2.7%. Shares initially pulled back after the automaker reported second-quarter financials on July 19. Investor concerns over falling gross margins outweighed the global EV giant's above-forecast earnings and revenue. News of sales from Cathie Wood's ARK Invest ETFs may also have fueled some downside momentum.
Tesla stock ranks fourth in IBD's automaker industry group. It has a 97 Composite Rating out of 99. Tesla stock has a 88 Relative Strength Rating and its EPS Rating is 93 out of 99.
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