- Tesla announced major price cuts for US vehicles today, with the biggest drop affecting the Base Model Y. The entry-level EV costs $13,000 less today than yesterday (a 20 percent decrease), and must now also qualify for a $7500 federal tax credit.
- Tesla has also lowered the price of its vehicles in Europe, where the lowest-cost Model 3 is now nearly the same price as the VW ID.3.
- China’s market prices were also cut earlier this month, and people there have been protesting the cuts, even holding protests over the weekend demanding some of the money back. The company did not respond to that request.
First, some information to set the stage. At the end of 2022, new car prices in the US are finally starting to move down. Just a little, but it’s a trend reversal. Additionally, last year, electric vehicle sales accounted for 5.8 percent of all vehicles sold, up from 3.2 percent in 2021. Finally, Tesla’s share of EV sales fell from 72 percent in 2021 to 65 in 2022, and the automaker didn’t reach Wall Street. Road delivery forecast for last year. There is also the matter of the recent crash in Tesla’s share price.
How all of those facts influenced Tesla’s decision this week to take big red markers for some of the price tags isn’t something we want to speculate on, but it’s good to have context in knowing that Tesla made dramatic cuts to the MSRPs of its vehicles this week. . The automaker cut between 6 and 20 percent of its price, with the biggest discount going to the Model Y. The entry-level Model Y got $13,000 (20 percent) off and now starts at $54,630. This brings us to another related tidbit: The Reducing Inflation Act (IRA) that changed the federal tax incentive structure for EVs has a new maximum price limit for passenger cars to qualify. That limit? $55,000. The IRA is making another change to regulations, which means Tesla EVs can be eligible again, at least through March.
US Prices Return to Pre-2022 Levels
In the US, all Tesla models cost less today than they did earlier this week, and the discounts mean prices for the new 2023 Tesla have returned to where they were before the company made two significant price increases in 2022. Tesla also cut the prices of the models. 3 and Model Y in some European countries (Austria, France, Germany, Netherlands, Norway, Switzerland and the UK, according to CNBC. The price cut leaves the Model 3 roughly the same price as the ID.3, Volkswagen’s entry-level EV, in the market the.
Customers Angry over Sudden Price Cuts in China
Earlier this month, Tesla cut prices in China. As you might expect, people who have recently bought a new EV from the company are not happy. Last weekend, hundreds of Tesla owners protesting in the Tesla showroom across the country, Reuters reported. Tesla EV prices there are between 13 and 24 percent lower than in September. Protesters chanted, “Give back our money, give us back our car,” during one of the protests caught on video. Police were involved in monitoring protests in several cities, even facilitating meetings between protesters and Tesla staff, Reuters said, but made no public announcement about offering refunds or other benefits to people who had recently paid something much less expensive today. this. .
Because it doesn’t have a dealer network, Tesla can’t hide behind any dealer markups regarding price changes. Given the global nature of cuts, there should be a lot of interest in the automaker’s EV shipment numbers when Tesla is scheduled to report its fourth quarter 2022 results later this month.
