Elon Musk’s ownership of Twitter has been an overhang for Tesla stock (NYSE: TSLA). The stock has meanwhile failed to recover even as Musk is looking for a new CEO “foolish” enough to head the social media company.

Musk took the decision after the results of his Twitter poll showed that the majority of the respondents want him to step back from Twitter. He has confirmed that he would indeed quit as Twitter chief but would continue to control the engineering teams.

Tesla stock was trading higher in US premarkets yesterday amid optimism over Musk quitting Twitter. However, the rise was short-lived and Tesla stock closed lower in regular trading. The fall was all the more surprising as the wider US markets rebounded yesterday.

Markets have of late been concerned about the demand for Tesla cars as multiple reports have said that the company is cutting output in China. It was previously offering a $3,750 credit in the US to buyers who took Model 3/Y delivery in December.


Now, Reuters has reported that the company is offering a $7,500 credit to US buyers and a $5,000 credit to Canadian buyers who take the delivery of Model 3/Y in December. The company is also offering 10,000-mile free supercharging in order to spur sales.

Tesla Offers Discounts Ahead of Inflation Reduction Act Benefits

The discounts in the US would help Tesla increase sales in the US as some buyers might be postponing buying a Tesla car to the next year when a $7,500 EV tax credit would be applicable to its cars.

US President Joe Biden signed the Inflation Reduction Act. While the Act has many provisions, it also has several measures to increase EV adoption in the US. Previously, EV buyers in the US got a federal tax credit of up to $7,500.

However, once an automaker crossed the maximum threshold, the tax credit gradually came down. Tesla, General Motors, and Toyota cars stopped qualifying for the federal tax credit.

Beginning next year, even their cars would be eligible as the law does away with the upper limit.

Wolfe Research upgraded Tesla stock to a buy and raised its earnings estimates as it is bullish on the stock after the passage of the Inflation Reduction Act.

The Damage from Musk’s Twitter Antics Might Already be Done

Meanwhile, the damage from Musk’s Twitter antics might already have been done. Morgan Stanley, which is among the most visible Tesla bulls, has surveyed institutional investors and industry experts and the results are not surprising. Almost three fourth of the respondents believe that Musk’s ownership of Twitter has had some impact on TSLA’s price action.

Nearly 65% believe that Musk’s Twitter acquisition would have a negative impact on TSLA’s business going forward.

Other surveys have also shown that the Tesla brand has got tarnished. YouGov conducts surveys on consumers’ perceptions of leading brands, including Tesla. Historically, more people viewed the Tesla brand favorably than those who did negatively. However, the November 7 survey showed that more people view the Tesla brand negatively.

US-based consulting firm Morning Consult’s findings also showed that consumers’ negative perception of the Tesla brand is on a rise.

Tesla Has Lost in Popularity Since Musk Acquired Twitter

Kelley Blue Book’s quarterly Brand Watch Report showed that 64% of electric car shoppers considered a Tesla last quarter, which was below the 75% that did so a year back. Separately, S&P Global Mobility reported that TSLA’s market share in the US fell to 65% in the third quarter of 2022—down 6 percentage points from the last year.

Other EV companies like Rivian are also ramping up production which means that buyers now have multiple choices. While Rivian stock has crashed this year, analysts are largely bullish on the stock. We have a guide on how to buy Rivian stock.

As for Tesla, the stock’s price action post Musk’s offer to quit as Twitter chief shows that markets are quite pessimistic about the once red-hot EV stock and mere Musk distancing himself from Twitter would not help the stock move higher.

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