Tesla Shares Slip 3% as EV Maker Slashes Prices in Canada

Tesla shares slipped 3% Friday after reports that the electric vehicle maker has cut prices on some car models sold in Canada by as much as 6.9%.

The latest price cut adds to a pile of evidence signalling heightened competition after Tesla lost its crown to Chinese auto company BYD as the biggest EV maker in the fourth quarter. On Thursday, Tesla said on WeChat that it upgraded its hardware on the model Y car it sells in China as it seeks to boost sales, CNBC reported.

On Friday, Benzinga reported that Tesla cut prices on both the rear-wheel drive and the long-range version of the Model Y by C$4000 (about $2,990). While the rear-wheel drive version of the vehicle now starts at C$53,990, the long-range version starts at C$63,990, according to the report.

Tesla is cutting prices at a time when a US government probe on the safety of its vehicles is expanding. The company is recalling 2.2 million vehicles including certain 2012-2023 Model S, 2016-2024 Model X, 2017-2023 Model 3, 2019-2024 Model Y, and 2024 Cybertruck vehicles, the National Highway Traffic Safety Administration.

The recall isn't as damaging to the company's financial results, given that the remedy just involves an over-the-air software update, instead of the usual physical recall that entails returning the cars to the dealership for repairs.

The Tesla recall involves an incorrect font size displayed on the instrument panel for the brake, park and antilock brake system warning lights, the NHTSA said in its website.