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Gizmodo
7 days ago
- Automotive
- Gizmodo
Tesla Turns to a Classic Tactic to Spark a Buying Frenzy
If you've been thinking about buying a Tesla, the company has a direct and urgent message for you: the clock is ticking, and time is running out. During a conference call with analysts on Wednesday, Tesla's Chief Financial Officer, Vaibhav Taneja, issued a stark warning to potential U.S. customers. The popular $7,500 federal tax credit for electric vehicles is set to expire permanently on September 30th, and the company is signaling that it may not be able to fulfill orders for customers who wait too long. 'The 'One Big, (beautiful) Bill has a lot of changes that would affect our business in the near term,' Taneja explained, referring to the Trump administration's new legislation. 'The first among those changes is the repeal of the IRA EV credit of $7,500 by the end of this quarter.' IRA is the Inflation Reduction Act (IRA) that provides tax credits for purchasing new ($7,500) and used ($4,000) electric vehicles (EVs) to encourage EV adoption. It was adopted under the Biden administration. Taneja cautioned that Tesla has 'limited supply of vehicles in the U.S this quarter' and that the company is already within the lead times for ordering parts. This means its ability to build new cars to meet a last-minute rush is severely constrained. It's a supply chain problem. His message to buyers was unambiguous: 'If you are in the U.S. and looking to buy a car, let's roll now as we may not be able to guarantee delivery for orders placed in the later part of August and beyond.' In other words, Tesla is creating a final sales push, urging customers to act immediately to secure one of the remaining vehicles eligible for the discount. Once the tax break is gone, Tesla buyers could pay thousands more out of pocket for the same vehicles. The carmaker had already rolled out steep discounts earlier this summer to spark sales before the credit disappears, as previously reported by Gizmodo. But Taneja says those incentives will now be scaled back: 'We have rolled out all our planned incentives already and will start pairing them back as we start to sell,' Taneja said. It is important to note that this urgent message comes at a time when Elon Musk's group is seeing its sales continue to decline, as well as its profits and earnings. Tesla's Nightmare Continues As Musk Warns of 'Rough Quarters'Ahead For potential buyers who were holding out for Tesla's much-anticipated, lower-cost model, the news was less encouraging. Taneja confirmed that the company is prioritizing the production of its current, more expensive models to maximize sales before the tax credit disappears. As a result, the rollout of the more affordable car will be delayed. 'We started the production of the lower-cost model as planned in the first half of 2025,' he said. 'However, given our focus on building and delivering as many vehicles as possible… before the EV credit expires and the additional complexity of ramping a new product, the ramp will happen next quarter slower than initially expected.' This creates a clear dilemma for consumers: rush to buy a more expensive Model 3 or Y now to get the $7,500 discount, or wait longer for the cheaper model but pay the full sticker price without any federal incentive. Tesla has put its cards on the table. For American consumers, the next month represents the last chance to buy into the electric car brand with a significant financial tailwind from the government. After that, the market, and the price, will look very different.
Yahoo
24-07-2025
- Automotive
- Yahoo
Tesla misses on Q2 earnings but says 'more affordable' model planned for 2025 production
Tesla (TSLA) reported a slight earnings and revenue miss in the second quarter but said its "more affordable" model was still slated for production in the second half of 2025. Tesla reported second quarter revenue of $22.50 billion vs. $22.64 billion expected (per Bloomberg consensus), a 12% drop compared with the $25.05 billion reported a year ago. Tesla posted adjusted EPS of $0.40 vs $0.42, with operating income coming in at $923 million vs. $1.23 billion expected. Of particular interest, Tesla's revenue from the sale of regulatory credits fell to $439 million from $890 million a year earlier, and will continue to drop following passage of the "One Big Beautiful Bill" (OBBB). "We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025," the company said in a statement. Tesla also said its purpose-built robotaxi was still scheduled for volume production starting in 2026. Tesla stock slumped over 6% in premarket trading on Thursday, after starting to slide during the company's earnings call. CFO Vaibhav Taneja said on the call that the OBBB recently passed by Congress would affect Tesla's business, leading to a "pull forward" in sales ahead of the $7,500 tax credit expiring at the end of Q3. 'Given the abrupt change, we have limited supply of vehicles in the US this quarter,' Taneja said. 'We may not be able to guarantee delivery orders placed in the later part of August and beyond.' Taneja also said Tesla would ramp up volume production of the upcoming affordable model once the EV tax credit expired. Nevertheless, Musk admitted that once the credit expires, Tesla could experience "a few rough quarters." Read more: Live coverage of corporate earnings A year ago, Tesla said in its Q2 earnings report that production remains on track for new vehicles, likely including a cheaper EV, in the first half of next year. There have been no indications or even renderings of a new vehicle, let alone production of a vehicle priced around $30,000. Tesla's cheapest EV is the rear-wheel-drive Model 3 sedan, which starts at around $43,000 without incentives. Tesla has expanded its robotaxi testing in Austin, Texas, with a bigger operating area and likely more vehicles coming. Musk said the company would expand testing to the San Francisco Bay Area, but reports suggest the applications for those state permits have not been submitted. Separately, Bloomberg reported on Wednesday that Tesla was in talks with Nevada officials to test the company's robotaxi service. Tesla's second quarter earnings report comes at a time when the S&P 500 (^GSPC) and Nasdaq (^IXIC) are surging to new highs, bucking Trump's tariff war that led to broad-based selling and fears of a global economic slowdown. Musk's reputational hit stemming from his political activities, the rise of more competition, and US consumer preferences for vehicles like hybrids have Tesla and the EV industry as a whole worried. For Tesla in particular, weakness in key regions like Europe has been an ongoing issue, and the latest registration data shows US sales sliding as well. This resulted in Tesla delivering only 384,122 vehicles globally in Q2, a 13.5% drop year over year. The changeover to the refreshed Model Y may have blunted sales. But the question for management is the availability picture for that new Model Y in Tesla's main selling regions. "It is difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains, our cost structure and demand for durable goods and related services," Tesla said in its Q2 shareholder deck. "While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the actual results will depend on a variety of factors, including the broader macroeconomic environment, the rate of acceleration of our autonomy efforts and production ramp at our factories." Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
21-07-2025
- Automotive
- CNN
With global sales slumping, Tesla tries to break into a new market
Tesla has started selling cars in India, the world's most populous country – but at a hefty price tag. Tesla, which is facing slumping sales and complications from CEO Elon Musk's political entanglements, opened its first showroom in Mumbai on Tuesday. The company needs to boost its sales, and pushing into a new market with untapped buyers could help. The Tesla web site shows the price of a Model Y at 61,07,190 rupees, or about $71,000. However, the same car is listed on the company's site for US buyers at about $45,000 before applying a $7,500 federal tax credit for electric vehicles (EV), which would lower the cost to $37,500. (That tax credit is due to expire at the end of September.) Tesla has had a long-stated desire to sell in India, but Indian tariffs on foreign autos, which can more than double the cost of a vehicle there, have been the barrier, according to the World Trade Organization and Tesla executives. 'We've been working on getting into India. India is a very hot market,' said Tesla CFO Vaibhav Taneja in a call with investors in April. 'It will be a great market to enter because India has a big middle class.' But he said the tariffs 'create a little bit of tension, which we're trying to work around.' India is the third largest market for auto sales behind China and the United States. The absence in India has hurt Tesla's global sales, which are suffering the largest sales decline in the company's history in the face of increased competition, and a backlash in some markets to CEO Elon Musk's political activities. Nearly half of Tesla's sales revenue comes from the United States, while just over 20% comes from China. The other 30% comes from other countries. The United States and India are involved in trade talks, and President Donald Trump announced two months ago that India had offered to eliminate tariffs on US imports as part of a deal to avoid the administration placing steep tariffs on all Indian exports to the United States. But Indian officials said at that time that there was no preliminary deal in place. Tesla is not only losing sales to legacy automakers that have increased their EV offerings, but it faces growing competition from Chinese EV makers. In fact, Tesla is poised to lose its title of the world's largest EV maker to Chinese automaker BYD, even though BYD is not able to sell in United States. The company has been losing some of its sales executives, with the Wall Street Journal reporting Tuesday that Troy Jones, Tesla's vice president of sales and service, has left the company. The report was attributed to people familiar with the matter. Tesla did not respond to a request for comment. Tesla executives have spoken of a desire to build a plant in India, but at the moment its existing plants in the United States, China and Germany have more capacity than there is demand for its vehicles. Its plans for another plant in Mexico are currently on hold.
