Electric vehicle maker Tesla is cutting prices in the United States and throughout Europe again, according to listings on the company’s website on Thursday night in the U.S.
Tesla did not respond to a request for comment on what motivated it to slash prices this week.
However, the move in the U.S. may help Tesla qualify for more federal EV tax credits, and stoke sales volume here and abroad, after competition and interest rates increased.
In Europe, Tesla cut prices on its Model 3 and Model Y vehicles in Austria, France, Germany, the Netherlands, Norway, Switzerland and the U.K.
The Tesla Model Y (left) and Model 3 electric cars at the company’s official launch event in Bangkok on Dec. 7, 2022. The Model 3 is the company’s entry-level sedan. The Model Y is categorized by some as an SUV and others as a crossover.
Lillian Suwanrumpha | Afp | Getty Images
Reuters reported that in Germany, Tesla cut prices on the Model 3 and the Model Y from 1% to around 17%, depending on the configuration. Tesla’s Model 3 was the bestselling electric vehicle in Germany in December 2022, followed by the Model Y. The company beat out Volkswagen and its popular electric vehicle the ID.4 in Germany.
Tesla’s Model 3 at its discounted price is comparable to Volkswagen’s entry level electric car, the ID.3.
According to the independent EV industry researcher, TroyTeslike, the price of a new Tesla Model 3 in the U.S. has dropped between 6% and 14%, depending on configuration, and the cost of the Model Y dropped about 19%, also depending on configuration.
The Model 3 is Tesla’s entry-level sedan. The Model Y is categorized by some as a sport utility vehicle and others as a crossover. The company also lowered prices of its more expensive, Model S sedan and falcon-wing SUV Model X vehicles in the U.S.
Generally, EVs qualify for tax credits in the U.S., depending on what form factor or category they fall into, their efficiency and range (meaning the number of miles they can travel on a fully charged battery) as well as the manufacturers’ suggested retail price.
The U.S. government has delayed setting new rules about sourcing of raw materials and battery components to qualify automakers for a $7,500 clean vehicle tax credit until at least the end of March 2023.
This means that Tesla — and other EV makers — can buy parts and critical minerals from suppliers around the world for now, and still qualify for some EV subsidies. Those seeking to qualify for federal subsidies do need to complete final vehicle assembly of their electric cars in North America under current, interim rules.
The latest round of discounts by Tesla may set the company up to reap the benefits of EV tax credits in both the near and longer term. But it also risks upsetting customers who just agreed to take delivery of new electric cars from Tesla before the end of 2022 at higher prices.
Earlier this month, Tesla angered customers in China by slashing prices on its Model 3 and Model Y cars there after many had agreed to take delivery at higher prices before Dec. 31. Some of the customers staged protests and demanded rebates, but so far, Tesla has not relented, according to a Reuters report.
In late December, Tesla discounted its Model 3 and Model Y cars by about $7,500 to entice customers to take deliveries before the end of the fourth quarter. Tesla also offered some U.S. customers 10,000 miles’ worth of free charging (at Tesla Supercharging stations) if they agreed to take delivery before the year’s end.
Despite the discounts, in the fourth quarter of 2022, Tesla reported deliveries of 405,278 vehicles and production of 439,701 vehicles. The company had been telling shareholders to expect 50% in annual vehicle delivery growth over a multiyear horizon but fell shy of that annual goal and analysts’ expectations in the fourth quarter.
Tesla now operates its first U.S. vehicle assembly plant in Fremont, California, a newer one in Austin, Texas, its first overseas factory in Shanghai, and a newer one in Gruenheide, Germany.
The company’s production capacity should be much higher in 2023 than in previous years with those factories, but bearish analysts have voiced concerns over a possible “demand cliff.”
Tesla is now facing more competition, higher interest rates and slower consumer spending than in recent years, Bernstein analysts wrote in a note on Jan. 12.
They said, “We believe that many investors underestimate the magnitude of the demand challenges Tesla is facing.” However, the firm has had an “underperform” rating and price target of $150 on shares of Tesla after the company’s share price declined in recent months.
CEO Elon Musk sold billions of dollars’ worth of his Tesla shares last year, in part to finance a leveraged buyout of Twitter for around $44 billion. Since he took over Twitter and appointed himself CEO in late October, Musk has been splitting time, and sharing some resources, between the social media business and his electric car company.
Tesla plans to report its 2022 fourth-quarter results on Jan. 25, 2023, and should share its new outlook for the year ahead then.
Meta’s Mark Zuckerberg plans to visit South Korea, scheduling key meetings during the trip, according to a statement by Meta on Wednesday, which did not provide further details. Reportedly, Zuckerberg is anticipated to meet with Samsung Electronics chairman Jay Y. Lee later this month to discuss AI chip supply and other generative AI issues, as per the South Korean newspaper Seoul Economic Daily, citing unnamed sources familiar with the matter.
Alex Wong | Getty Images News | Getty Images
Meta extended its ban on new political ads on Facebook and Instagram past Election Day in the U.S.
The social media giant announced the political ads policy update on Monday, extending its ban on new political ads past Tuesday, the original end date for the restriction period.
Meta did not specify the day it will lift the restriction, saying only that the ad blocking will continue “until later this week.” The company did not say why it extended the political advertising restriction period.
The company announced in August that any political ads that ran at least once before Oct. 29 would still be allowed to run on Meta’s services in the final week before Election Day. Other political ads will not be allowed to run.
Organization with eligible ads will have “limited editing capabilities” while the restriction is still in place, Meta said. Those advertisers will be allowed to make scheduling, budgeting and bidding-related changes to their political ads, Meta said.
Meta enacted the same policy in 2020. The company said the policy is in place because “we recognize there may not be enough time to contest new claims made in ads.”
Google-parent Alphabet announced a similar ad policy update last month, saying it would pause ads relating to U.S. elections from running in the U.S. after the last polls close on Tuesday. Alphabet said it would notify advertisers when it lifts the pause.
Nearly $1 billion has been spent on political ads over the last week, with the bulk of the money spent on down-ballot races throughout the U.S., according to data from advertising analytics firm AdImpact.
Sam Altman, CEO of OpenAI, attends the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, January 18, 2024 (L), and Amazon CEO Jeff Bezos speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.
Reuters
Physical Intelligence, a robot startup based in San Francisco, has raised $400 million at a $2.4 billion post-money valuation, the company confirmed Monday to CNBC.
Investors included Amazon founder Jeff Bezos, OpenAI, Thrive Capital and Lux Capital, a Physical Intelligence spokesperson said. Khosla Ventures and Sequoia Capital are also listed as investors on the company’s website.
Physical Intelligence’s new valuation is about six times that of its March seed round, which reportedly came in at $70 million with a $400 million valuation. Its current roster of employees includes alumni of Tesla, Google DeepMind and X.
The startup focuses on “bringing general-purpose AI into the physical world,” per its website, and it aims to do this by developing large-scale artificial intelligence models and algorithms to power robots. The startup spent the past eight months developing a “general-purpose” AI model for robots, the company wrote in a blog post. Physical Intelligence hopes that model will be the first step toward its ultimate goal of developing artificial general intelligence. AGI is a term used to describe AI technology that equals or surpasses human intellect on a wide range of tasks.
Physical Intelligence’s vision is that one day users can “simply ask robots to perform any task they want, just like they can ask large language models (LLMs) and chatbot assistants,” the startup wrote in the blog post. In case studies, Physical Intelligence details how its tech could allow a robot to do laundry, bus tables or assemble a box.
To Barry Diller, a friend of Amazon founder Jeff Bezos, the decision for The Washington Post not to endorse a candidate in tomorrow’s presidential election was “absolutely principled” — and poorly timed, he said Monday on CNBC’s Squawk Box.
“They made a blunder — it should’ve happened months before, and it didn’t, and that’s the issue with it,” Diller said.
Diller is chairperson of both online travel company Expedia and IAC, which owns media platforms and websites like Dotdash Meredith and Care.com. He and Bezos appear to have been close friends for years, with Diller and his wife, fashion designer Diane von Furstenberg, hosting Bezos’s engagement party to fiancee Lauren Sanchez.
The decision not to endorse a presidential candidate in the 2024 race or for future presidential races came directly from Bezos, the paper’s owner, according to an article published by two of the Post’s own reporters.
The move prompted public condemnation from several staff writers, a flood of at least 250,000 digital subscription cancellations and the resignations of at least three editorial board members.
Bezos defended his position in his own op-ed late last month, calling the move a “meaningful step in the right direction” to restore low public trust in media and journalism.
“Presidential endorsements do nothing to tip the scales of an election,” Bezos wrote, emphasizing that the decision to not endorse a candidate was made “entirely internally” and without consulting either campaign. “I wish we had made the change earlier than we did, in a moment further from the election and the emotions around it.”
Diller said he spoke to Bezos following the decision.
“I think it was absolutely principled,” Diller said. “The mistake they made — and it was a mistake admitted by him — was timing.”