Tesla cuts prices by up to a fifth to boost demand

In an effort to increase customer demand, Tesla has slashed the price of some of its most well-known electric vehicles by thousands of pounds in both Europe and the US.

The company must contend with a bleak prognosis for the world economy as well as heightened rivalry from automakers.

The price reductions range from 10% to 13% in the UK, while they can reach up to 20% on some US models.

A base Model 3 will cost new UK consumers £5,500 less, while the least expensive Model Y will cost them £7,000 less.

The best-selling models were nevertheless purchased by more than 16,000 consumers last year, some of whom complained that they had overpaid.

Customers in China, where Tesla announced price decreases last week, had a similar reaction.

Disgruntled Tesla owners staged protests outside of delivery centres in Shanghai and other cities over the weekend, demanding compensation.

Tesla has lowered its costs twice in China in the past six months, and they are now between 13% and 24% lower than in September.

Tesla stated that it will apply the new reduced pricing to customers who had ordered but had not yet received their vehicle in an effort to prevent similar objections in the US and Europe.

According to Association of Fleet Professionals chair Paul Hollick, the price reductions will make electric vehicles more accessible to his organization’s members. The “disorderly marketing,” he claimed, was not good news.

Electric car demand has been steadily increasing as a result of growing gasoline prices and consumer worries about climate change.

Tesla delivery rates increased by 40% globally in 2022, although that was less than the market anticipated.

The sharp decline in the share price severely hurt Mr. Musk’s money and caused him to lose his title as the richest man in the world.

Following the price-lowering announcement, Tesla shares dropped once more as a result of investor concerns that reduced prices would reduce profitability.

Dan Ives, a Wedbush analyst, claimed that the action was a “shot across the bow” to Tesla’s competitors. Tesla was “not going to play nice in the sandbox with an EV price war currently starting,” it was implied.