Tesla cuts prices in US, Europe in pivot to drive sales
The US price cuts on the Model 3 and Model Y ranged between 6% and 20% compared with the prices that held before the discount.
Tesla slashed prices on its electric vehicles in the United States and Europe, the automaker’s website showed, extending a new strategy of aggressive discounting after missing Wall Street estimates for deliveries.
The US price cuts, announced late Thursday in US time on the Model 3 sedan and Model Y crossover SUV, ranged between 6% and 20% compared with prices before the discount, according to Reuters calculations. That is before accounting for an up to $7,500 federal tax credit that took effect for many electric vehicle models at the start of January.
It also cut prices for its Model X luxury crossover SUV and Model S sedan in the United States.
NEW SALES LEADERSHIP
The shift is the first major move by Tesla since appointing its lead executive for China and Asia, Tom Zhu, to oversee US output and sales.
Tesla cut prices in China and other Asian markets last week. Along with a previous price cuts announced in October and recent incentives, the China price for a Model 3 or Model Y was down 13% to 24% from September after the recent move, Reuters calculations showed.
Tesla has also cut prices in South Korea, Japan, Australia and Singapore.
Analysts had said the China price cuts would boost demand and deepen the pressure for its rivals there, including BYD to follow suit in what could become a price war in the largest single market for electric vehicles.
That pressure could be building in Europe as well.
Tesla’s Model 3 was the best-selling electric vehicle in Germany last month, followed by the Model Y, beating out Volkswagen’s all-electric ID.4. Volkswagen recently raised the price of its entry-level ID.3, putting it on parity with the now-discounted Model 3.
Tesla missed Wall Street estimates for fourth quarter deliveries. Full year growth in deliveries was 40% – also short of Musk’s own forecast of 50% growth.
Last month, Musk said “radical interest rate changes” had changed the industry-wide outlook and that Tesla could lower pricing to sustain volume growth, which would result in lower profit.
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