Tesla Cuts Prices Up To 20 Percent Amid Slowing Demand
In an increasingly competitive electric vehicle market and following slowing demand towards the end of 2022, Tesla has cut prices of their EVs in the US and Europe by between 6-20%, depending on the model.
All makers of electric vehicles are ramping up production globally as the deadline for the ban on internal combustion engines in the UK and EU draw closer. Tesla now faces stiff competition from not only EV makers, such as Lucid and Fisker, but also pretty much every conventional car brand which has either expanded their line-up to include EVs or vowed to phase out ICE engines eventually.
In the US, the move could mean that Tesla will qualify for federal EV tax credits which would be a boost after the surge in interest rates for auto loans. The government had planned to implement new criteria regarding raw material and battery sourcing for automakers to quality for a US$7,500 “clean vehicle” tax credit, but that has been postponed until March 2023 earliest, which means Tesla had best take advantage of the tax credit while they still qualify.
Wow, Tesla just announced massive price drops in the US across the board. Model Y LR is now $13,000 cheaper before the tax credit and $20,500 cheaper including the tax credit.
In case you are wondering if this affects my delivery estimate for Q1, yes, yes it does. pic.twitter.com/2OkKQ8XoZh
— Troy Teslike (@TroyTeslike) January 13, 2023
While the price slash may help Tesla get off on a good start in the new year, customers who had taken delivery of their vehicles just a month or two ago are upset. Earlier this month, Tesla reduced the prices of the Model 3 and Model Y in South Korea, Japan and China; some Chinese customers, who bought their Teslas late last year at a discount, were so angered that the price of their cars are now even cheaper that they staged protests at Tesla showrooms and demanding for rebates.
In the long run, though, the price reduction may make the EVs suddenly attainable by a group of people who were previously priced out of Tesla’s offerings. And as EV automakers head into a price war, Tesla will need to become competitive to stay in the game.
