Tesla extends price cuts in US and Europe amid sales push

Tesla extends price cuts in US and Europe amid sales push

  • Tesla cuts prices in the US and Europe by up to 20%
  • The move follows cuts in Asia last week
  • Certain models are now eligible for US tax credits
  • Model 3 price in Germany in line with Volkswagen’s ID.3

Jan 13 (Reuters) – Tesla (TSLA.O) has cut prices for its electric vehicles in the United States and Europe, the automaker’s website says, extending an aggressive new discount strategy after it missed Wall estimates. Street for deliveries.

The U.S. price cuts, announced Thursday evening at U.S. time on the Model 3 sedan and Model Y crossover SUV, ranged between 6% and 20% from pre-rebate prices, according to Reuters calculations.

That’s before factoring in a federal tax credit of up to $7,500 that went into effect for many electric vehicle models in early January.

Tesla also cut prices for its Model X luxury crossover SUV and Model S sedan in the United States.

In Germany, it slashed prices for the Model 3 and Model Y – its global top sellers – by around 1% to nearly 17% depending on configuration. It also cut prices in Austria, Switzerland and France.

For a U.S. long-range Model Y buyer, the new Tesla price combined with the U.S. subsidy that took effect this month equates to a 31% discount. Additionally, Tesla’s move expanded the vehicles in its lineup eligible for the Biden administration’s tax credit.

Prior to the price cut, the five-seat version of the Model Y was not eligible for this credit, a designation Tesla Chief Executive Elon Musk called “angry.” After the price reduction, the long-range version of the Model Y will qualify for the $7,500 federal credit.

Combined with price cuts announced last week in China and other Asian markets, the move marks a reversal in Tesla’s largest markets from the strategy it has pursued for much of 2022, when the demand was strong and that the average selling prices of its electric vehicles were tending to increase.

“This should really boost 2023 (Tesla) volumes,” Gary Black, a Tesla investor who has remained bullish on the company and its prospects thanks to the recent sharp decline in the share price, said in a statement. tweet. “It’s the right decision.”

Still, some users on online Tesla fan forums complained that the price cuts disadvantaged customers who had recently purchased their vehicle, leaving them with a lower-value item in the used-car market.

“I’m not very happy with these huge price swings. Just cutting 10,000 euros like this – definitely makes you feel like you just paid way too much,” one user wrote on a forum. Tesla Drivers and Friends” on Friday.

In China, where Tesla slashed prices last week by 6 to 13.5 percent, owners protested at delivery centers across the country, pressing Tesla for compensation.

Before the price drop, Tesla’s inventory in the United States, as tracked by the models its website lists as immediately available, tended to increase. Prices for used Tesla models had also fallen, increasing pressure on it to adjust new-car sticker prices.

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The move is Tesla’s first major move since appointing its chief China and Asia executive, Tom Zhu, to oversee production and sales in the United States.

Tesla lowered prices in China and other Asian markets last week. Along with previous price cuts announced in October and recent incentives, the Chinese price of a Model 3 or Model Y fell 13% to 24% from September after the recent decision, according to Reuters calculations. .

Tesla also cut prices in South Korea, Japan, Australia and Singapore.

Analysts had said China’s price cuts would boost demand and increase pressure on rivals, including BYD (002594.SZ), to follow suit in what could become a price war over the biggest single market for electric vehicles.

This pressure could also intensify in Europe.

Tesla’s Model 3 was the best-selling electric vehicle in Germany last month, followed by the Model Y, beating Volkswagen’s all-electric ID.4 (VOWG_p.DE). Volkswagen recently raised the price of its entry-level ID.3, putting it on par with the now discounted Model 3.

Tesla missed Wall Street estimates for fourth-quarter deliveries. Full-year shipment growth was 40%, also below Musk’s own forecast of 50% growth.

Last month, Musk said “radical changes in interest rates” had changed the industry-wide outlook and that Tesla could lower prices to support volume growth, which would lead to lower prices. profits.

Tesla shares under pressure

Reporting by Victoria Waldersee in Berlin, Zhang Yan in Shanghai, Hyunjoo Jin in Seoul and Kevin Krolicki in Singapore; Editing by Lincoln Feast, Kenneth Maxwell and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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