Tesla lowers the prices of some of its models in Europe and the United States

Tesla lowers the prices of some of its models in Europe and the United States

Jan 13 (Reuters) – Tesla has slashed prices for its flagship vehicle models in the United States and Europe, with discounts of up to 20%, the electric carmaker’s website shows.

The move, which sent Tesla’s market price tumbling 4.5%, comes after its chief executive, Elon Musk, warned of price cuts due to higher interest rates, to support volume growth at the expense of earnings.

In France, the price of the entry-level version for the Model 3 has dropped from 8,500 euros to 44,990 euros, which makes the vehicle eligible for the ecological bonus of 5,000 euros.

The group led by Elon Musk had already announced last week a further drop in the prices of its vehicles in China, its second largest market, as well as in South Korea, Japan, Australia and Singapore.

Analysts then believed that these price cuts could force competitors in China to follow Tesla’s example and create a price war in the largest market for electric vehicles.

This pressure could also be exerted in Europe.

The European auto stock market sub-index fell 2% at 10:30 a.m. GMT, posting the largest drop in the STOXX 600.

In the United States, the manufacturer’s largest market, there were drops on Thursday evening ranging from 6% to 20% on the Model 3 and the Model Y, according to calculations made by Reuters on the prices displayed on its website.

These new prices do not take into account the federal credit of 7,500 dollars granted since the beginning of the month for the purchase of a large number of electric vehicles.

In Germany, the prices of Model 3 and Model Y – its best sellers worldwide – have been reduced by 1% to almost 17% depending on the options. Tesla has also lowered its prices in Austria and Switzerland.

CHANGE OF STRATEGY

This is Tesla’s first major step since Tom Zhu, then the group’s China boss, was promoted to CEO.

take direct supervision

of the electric car manufacturer’s assembly plants in the United States as well as the management of commercial operations in North America and Europe.

These price cuts mark a reversal from Tesla’s strategy in 2022, when demand was strong and average selling prices for its electric vehicles tended to rise.

“This should really boost volumes in 2023 (Tesla),” Gary Black, a Tesla investor who remained optimistic about the company and its prospects despite the recent sharp decline in the share price, said on Twitter. “It’s the right decision.”

Still, some users of online Tesla fan forums have complained that price cuts would disadvantage customers who have recently purchased their vehicle, lowering its value on the used market.

“I’m not very happy with these huge price swings. A reduction of 10,000 euros like that really gave the impression of having paid way too much,” wrote a user on the “Tesla Drivers and Friends” forum. friday.

In China, where Tesla cut prices by 6 to 13.5%

last week

, owners protested at delivery centers across the country, demanding compensation from Tesla. (Report Kevin Krolicki; French version Jean Terzian and Kate Entringer, said by Blandine Hnault)