Posted on 16 Jan 2023
Tesla has spread its price cutting strategy to Europe, the US, and Canada in a bid to boost demand for its vehicles and increase EV affordability, Kallanish reports.
The EV maker announced a number of reductions in the price of its Model 3 and Model Y, varying with markets and configurations. While in Germany prices of the Model Y have dropped by as much as 17%, at the discounted price, the Model 3 reaches price parity with VW’s entry level BEV model, ID. 3. In the US and Canada some prices have dropped by up to 20%, which means some models are now eligible for the US’s $7,500 EV tax credit at least until the end of March, when new regulation is expected.
Tesla UK said on Friday that customers, individual and business buyers, could drive a Tesla starting from £42,990 ($52,382). This price is for the Model 3 rear-wheel sedan, which is now £5,500 cheaper. Prices in the UK market have fallen by as much as £8,000 for the Model Y Performance, now priced at £59,990. The basic configuration of the crossover is £7,000 cheaper at £44,990.
“At Tesla, our goal is to accelerate the transition to sustainable energy,” the company says. “As production ramps up across our gigafactories, we are able to make our vehicles more affordable.”
Lowering prices should increase demand and help the company boost deliveries after record production last year. Yet not all customers are happy about Tesla’s move – particularly the ones who have recently purchased a vehicle at full price and now are reporting “another 20% depreciation.” Chinese customers have shown their anger at Tesla showrooms earlier this month, and western peers are taking to social media to demand a remedy from ceo Elon Musk.
One customer says: “They should compensate recent customers with [free] self-driving or super-charging. I am very unhappy with them and have cancelled plans for Tesla Solar.”
Paul Hollick, chair of the UK’s Association of Fleet Professionals, believes the move is good news and should put pressure on other manufacturers to take similar action in the coming months.
“However, it has also introduced an element of disorderly marketing for Tesla, which is never good news for residual values, and it will be interesting to see the reactions of both leasing companies and the pricing guides in the next few days,” he says. “The company would do well to introduce some kind of redress.”
Last October, Musk hinted of cost reduction on Tesla prices in 2023 due to deflation of commodities and logistics costs. He also said then that the company would sell every car it produced, whilst targeting a 50% annual growth in deliveries. Tesla was short of meeting the targets in 2022.
In Europe, markets such as Austria, France, Germany, the Netherlands, Norway, and Switzerland are also benefitting from Tesla’s price reductions for deliveries by end of March.
Undelivered orders are expected to be automatically updated to reflect the new price on delivery.
Source:Kallanish
