Tesla is drastically reducing the prices of its cars all over the world. A historic situation that could allow him to defeat his rivals. But doesn’t this also hide the lack of love for the brand among customers?
Tesla has always been accustomed to changing the prices of its cars overnight without warning. After the brand sold its two-star car in China last December, the Model 3 and Model Y in the U.S. suffered a marked decline. But prices in Europe remained the same until Friday, January 13, when sedans and SUVs took advantage of incredible price cuts. A sharp reduction later made the two cars eligible for the environmental bonus, now limited to cars under €47,000.
A historical situation
For the first time in the history of the brand, Prices of Tesla cars around the world are falling, and not only in a certain region. Really and as advertised by the site Electrekall vehicles in the series benefit from significant price reductions in the US, even the Model S and Model X. Exclusivity for the American market, sedans and SUVs lose between 9 and 15%.
For example, the standard Model S drops from $104,990 to $94,990 (from €97,116 to €87,866 in a total conversion) excluding taxes, a reduction of around $10,000 (€9,250). The Model X loses $11,000 (about €10,175), going from $120,990 to $109,990 (about €111,916 to €101,741). A nice drop for two of the brand’s historic models, whose plaid versions are also of interest.
An unprecedented situation for the brand, which until recently continued to increase the prices of its cars, has moved away from the sales promise. A decent sedan for under $35,000, although a version of the Model 3 with this price was briefly released in 2019. With the introduction of the Model 2, a goal that was finally achievable was half-confirmed within a few months. But now, Tesla has recently bucked the trend and sharply dropped its prices. Indeed, Renault has increased the price of its Megane E-Tech, and Dacia has done the same with the Spring.
So why does the American brand have this strategy? Although it has reached its goal of delivering one million cars by 2022, it is still going through a bad patch when it has a large inventory to sell. A victim of a certain lack of love from Asian as well as American customers, despite price cuts and the return of a sponsorship program, Elon Musk’s firm must therefore find a way to deceive. Especially since then Tesla faces strong competition from Chinese automakersand in 2023 it may experience the worst year in its history.
But Elon Musk’s company made a radical decision. Historical fact: Tesla Model 3 and Model Y have never been more affordable in China. So much so that local competition is starting to be feared as competing Chinese electric cars are priced higher!
A quick fix?
But this general price reduction may be worldwide let the builder keep his head above water, even to put a nice blow on their opponents. The Model 3 and Model Y were already good value for money, but with this reduction, Tesla risks undermining most of its competitors.
Indeed, by making their cars so affordable, Tesla could entice customers en masse and encourage them to take the plunge. So it will come as no surprise that the Model Y is already very successful, especially in Europe the best-selling electric car in the world over the next few months.
Recall that the SUV was already the most registered vehicle in the Old Continent last November, combining all engines. Excellent performance for an SUV that already received this name last September. In any case, this sharp drop in prices is quite unexpected, as Elon Musk promised that it would only go down if inflation is low. However, this is far from the case it increased by 5.2% in 2022 in France alone. But it is true that it started to decrease a little.
If you want to treat yourself to a Tesla, now is the time. Indeed, although this historic decline will not last long, the price of the brand’s cars may increase in the coming months. Indeed, the firm had signed a lithium supply agreement with Piedmont Lithium, which contained a clause that stipulated a price freeze for this raw material. However, this one has been revised and the company now wants prices to vary according to the market.
However, the price of lithium has been rising sharply in the last two years, increasing by 1200%. Bloomberg. And this increase should then logically be reflected in the price paid by customers who expect robust batteries to be developed.
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