Model 3 and Model Y price cuts could soon hit Europe

It’s historic: Tao Lin, Tesla’s vice president in China, has given a long interview to Asian media. He then goes on to explain why Tesla has drastically reduced the prices of the Model 3 and Model Y in China. One can only hope for a similar decision in the rest of the world in the coming months. It also quashes some rumors, such as a hypothetical affordable compact Model 2.

At the beginning of January 2023, Tesla made a rather radical decision in China and drastically reduced the price of its most affordable electric cars, Model 3 and Model Y. So much so that these two models have never been cheap in China. The reason given by observers is the decrease in demand.

Tesla explains the price cuts

Tao Lin, Tesla’s vice president in China, shared a post on Weibo to counter these rumors. The latter further explains that price reductions are due to numerous optimizations of the production chain, as well as technical innovations at all levels, enables production at a lower cost than before.

After Tao Lin’s interview with Chinese media, the American firm is going a little further WeChat as a whole. The woman explains again that there is no demand problem in the company, neither does she this price adjustment reflects production costs. Indicates that prices may be scroll up or downdepending on the evolution of these costs.

Tao Lin clarified that the logistics crisis related to COVID is behind us and material shortages will not be as unpredictable as in previous years. As long as the company sets prices with less uncertainty. The woman adds this these price adjustments reflect our better understanding of the vehicle’s internal logistics and manufacturing costs“.

A high-performance electric car for €30,000?

In other words, by selling the Tesla Model 3 for 229,900 yuan (about 31,500 euros) and the Model Y for 259,900 yuan (about 35,700 euros), Tesla would not be selling at a loss. A very strange statement, since most other Chinese manufacturers (BYD and GAC Aion) recently announced price increases of 2000-8000 yuan (about 275-1100 euros). The reason given: the end of an environmental bonus in China and the increase in the cost of materials such as lithium, which are required for the design of batteries.

Tesla’s vice president in China brings a very interesting detail. This indicates a domestically produced car (in China). at least 15% cheaper than an imported car. This is thanks to the savings in customs duties and logistics costs.

A cheaper European Tesla in the future?

Most of the Teslas currently sold in Europe are manufactured at the Gigafactory in Shanghai. Except for a few models, such as the Model Y Grande Autonomie and Performance, which were produced in Berlin. We imagine that it is very likely that Tesla will lower the selling price of the Model Y in Europe if the manufacturer can do all the production in Germany. But it is not said, because Berlin currently produces only 3,000 cars per week, which is not enough to meet European demand.

Keep in mind that Tesla recently did some discounts in Europe, but it doesn’t look like price cuts. In France, the Tesla Model Y still sells for €53,490, down from €49,990 for the Model 3. However, we find it hard to think that prices will drop immediately on the Model Y, as its price position in Europe is anomalous, much cheaper. In the Propulsion version than the equivalent Model 3.

No Tesla Model 2 on the horizon?

At the end of the interview, Tao Lin wanted to deny many rumors. So, despite Tesla announcing a new platform next March, the Model 2 would not be available. Is the VP denying rumors that the car won’t be called the Model 2, as Elon Musk once mentioned? Or because it won’t be a new electric car, but a robot taxi?

See you in a few weeks to learn more about Tesla’s next electric cars.

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