Tesla ‘weapons’ profits as EV battle heats up – report

Tesla under criminal investigation in US over claims of autonomous driving - report

Tesla has responded to increased competition in the electric-car segment by cutting its huge profit margins, making waves in the auto industry — and offering big savings to customers.

The US electric car specialist Tesla has been accused of using the huge profit margins on its vehicles to instigate a price war among its competitors – while giving buyers big savings.

Tesla has reduced the price of its electric cars by up to 20 percent worldwide.

The move resulted in sales up as much as 500 percent in a month in parts of China after a 13 percent price cut in that market. Auto News China reports.

While the price of the Tesla Model 3 sedan fell 36,000 yen (AU$7,530) in China, the Tesla Model Y SUV fell £8,000 (AU$14,000) in the UK.

Germany recorded the largest price decline engine1 The Tesla Model Y SUV notification has been reduced by €9,100 (AU$14,060).

In addition to the discount electr reports that the Tesla Model Y is now eligible for a further €6750 (AU$10,430) subsidy from the German government, effectively reducing the electric SUV by almost AU$25,000.

In the US, prices fell by as much as 20 percent, allowing some models to qualify for a US$7,500 (AU$10,660) federal tax credit.

According to the news agency Reuters Tesla raked in between US$11,442 and US$15,653 (AU$16,240 to AU$22,250) for every car sold in 2022 – and the electric-car company is now able to comfortably pare those profits to boost sales as competition heats up.

The US automaker enjoys more than twice the average profit margin on vehicles sold by Volkswagen, four times the profit on each model sold by Toyota – the world’s largest automaker by volume – and five times the profit on each Ford sold. Reuters analysis shows.

Only Chinese newcomer BYD can boast of profits close to Tesla’s, getting away with as much as US$14,921 (AU$21,180) on each car sold.

High demand and limited supply of parts over the last three years have caused manufacturers to increase the prices of their models – including Tesla.

Now, with an influx of battery-powered models from other brands, Tesla has reversed course and lowered prices across its range — offering greater appeal to potential buyers while increasing the pressure on its rivals.

“These price cuts are likely to make business even more difficult as they try to ramp up production of EV offerings,” Bank of America analyst John Murphy said The Wall Street Journal.

MORE:Find used Tesla cars for sale
MORE:Find used Tesla cars for sale
Ben Zechariah

Ben Zachariah is a veteran Melbourne-based writer and motoring journalist who has worked in the automotive industry for over 15 years. Previously a truck driver, Ben completed his MBA in Finance in early 2021. He is considered an expert in the field of classic car investments.

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