Tesla panics, cutting prices in the US and Europe by up to 20 percent

Tesla panics, cutting prices in the US and Europe by up to 20 percent

Tesla electric car prices in the US and Europe have been reduced by up to 20 percent amid slowing demand and increasing competition for electric cars.

The US electric car specialist is taking a bold step that analysts see as a sign of panic Tesla has slashed prices on its model lineup by as much as $21,000 — or 20 percent — in the US and Europe.

The unprecedented price cuts come as Tesla CEO Elon Musk claims to have turned his attention back to the electric car specialist after a stalled launch during his recent takeover of Twitter.

Price cuts in the US and Europe – including the UK right-hand drive market – follow modest price cuts in the Asia-Pacific region earlier this month, including Australia and Tesla’s key market of China.

While Tesla prices were down as much as 4.7 per cent in Australia last week – and up to 13 per cent in China – they are now down as much as 13.5 per cent in the UK and up to in Germany to 17 percent and more down to 20 percent in the USA.

According to industry analysts, the price cuts are intended to boost sales amid slowing demand in some countries – and the arrival of a fleet of new electric car competitors at lower prices, the news outlet said Reuters reports.

Statements from Tesla representatives in the UK and Germany have said so car car Magazine in the UK and the Reuters global news outlet The price cuts come as a “normalization” comes from rising inflation and production costs that have led Tesla to hike prices over the past 12 months.

“After coming off a turbulent year of supply chain disruptions, we have seen some cost inflation normalizing, which gives us confidence to pass it on to our customers,” Tesla officials in Europe said in a statement.

For Tesla buyers in the U.S., the price cuts mean the entry-level five-seat Tesla Model Y Long Range is now eligible for a $7,500 government tax incentive that took effect on January 1, 2023 — which is the effective Raised price to 31 per cent or $20,500.

Prior to the Tesla price cut, only the seven-seat version qualified for the US tax credit because the five-seat was not considered an “SUV” by US tax officials — and therefore was above the $55,000 price limit of regular “cars” that eligible for the incentives, rather than the $80,000 limit for SUVs.

The tax credit for Tesla buyers in the US could reportedly be reduced to $3,750 starting in mid-March 2023, according to the electric car specialist’s website electr.

In the US, the cheapest Tesla on offer – the Model 3 rear-wheel drive sedan – has been reduced from US$46,990 (AU$68,000) to US$43,990 (AU$63,700) – while the biggest drop has been in the price of the Plaid sedan Model S applied ($135,990/AU$196,850 to $114,990/AU$166,500).

The largest percentage drop is for the five-seat Tesla Model Y Long Range SUV, which fell from US$65,990 (AU$95,500) to US$52,990 (AU$76,700) or US$45,490 (AU$65,800) , once the US government tax refund is included.

It’s unclear if the savings will be passed on to shoppers waiting in line in the US and Europe – as they were in Australia when the price cuts went into effect earlier this month.

However, Tesla buyers who recently picked up a car — including many before the end of 2022, when Tesla was offering sweeping discounts of up to $7,500 — expressed anger at the weekend’s shock price cuts.

Protests followed outside Tesla stores in China by owners accepting cars just before the end of 2022 – many of whom assumed prices would not fall after government rebates were withdrawn earlier this year.

It’s unclear if Tesla is preparing another price cut for Australia to bring our market in line with the price cuts seen in Europe and the US.

Price cuts in Australia earlier this month totaled between $1,600 and $3,400 before road charges and luxury car tax – or 1.9 percent to 4.7 percent – although prices for mandatory ordering and delivery fees fell by $50 and $50, respectively $25 raised at the same time.

Tesla and Twitter CEO Elon Musk last year hinted at plans for price cuts, calling the cost increases for the company’s vehicles over the past 18 months “embarrassing.”

“Since there’s a fairly long wait when someone orders our car — it’s about six months, or up to a year in some cases — we need to anticipate what the global inflation rate will be over that period,” Mr Musk told investors and the media in July 2022.

“So that’s what we’re trying to do on the [price rises]. … It is possible that there will be a slight fall in car prices. But that depends mostly on this global economic inflation that we can’t control.”

“I feel like we’ve raised our prices there quite a few times, honestly, [to] embarrassing levels.”

In addition to the price cuts, a report by The New York Times newspaper (about Teslarati) claims Elon Musk has told Twitter staffers he’s currently prioritizing the electric car giant, stating he’s “doing most of my Tesla work” before making himself available for Twitter meetings.

The controversial manager has come under increasing criticism since taking over from Twitter, which – among other factors – has sent Tesla’s stock price plummeting due to investors’ lack of confidence in Tesla’s leadership as Mr Musk spent his time between the two company splits.

The price of Tesla shares has fallen from $343.50 a year ago to $122.39 at the close of today’s overseas trading – wiping out nearly $300 billion of Elon Musk’s net worth in 2022, as per previously reported by drive.

Alex Misoyannis

Alex Misoyannis has been writing about cars since 2017 when he launched his own website Redline. He worked for Drive in 2018 before joining CarAdvice in 2019 and becoming a regular journalist on the news team in 2020. Cars have played a central role in Alex’s life, from leafing through car magazines at a young age to growing up surrounded by performance vehicles in a car-loving family.

Read more about Alex MisoyannisLinkIcon

Similar Posts:

Asley Simon

Learn More →

Leave a Reply

Your email address will not be published. Required fields are marked *