Tesla shares fall on doubts that latest autos will boost sales

Shares of Tesla fell Tuesday after it unveiled revamped auto models with somewhat lower starting prices to offset the demise of a federal electric vehicle tax credit.

Elon Musk’s electric vehicle maker began taking orders for “standard” versions of the Model 3 sedan and Model Y midsize priced at around $40,000 or less on the company’s website.

The revamped “standard” models are priced around $5,000 less than prior bare-bones versions of these vehicles.

The federal tax credit of up to $7,500 per vehicle expired on September 30 following sweeping tax and fiscal legislation backed by U.S. President Donald Trump that phased out initiatives designed to counter global warming.

Analysts were skeptical that the latest models, which were hyped over the weekend in Tesla social media posts, will boost sales at Tesla. Wall Street has been hungry for Musk to release brand new models that wow consumers.

CFRA Research’s Garrett Nelson called the announcement “a disappointment for investors desperately hoping for new models such as the long-awaited Roadster,” he said in an email.

“One of the biggest reasons behind Tesla’s market share losses is the staleness of its vehicle portfolio,” he added.

Dan Ives of Wedbush Securities said he was “relatively disappointed” that the new prices are only about $5,000 below prior versions of the Models 3 and Y, according to a note.

The exact price of the vehicle will be lower in US states like New York, where the vehicle is eligible for a $2,000 state tax credit, lowering the price to $34,900 from $36,990. However, the website estimates the price at $42,068 in New York when taxes and fees are included.

Shares of Tesla fell 4.1 percent in afternoon trading.