Recent reports reveal that the price of Tesla Model 3 vehicles has dropped between 6% and 14% as the company recently slashed the prices of its vehicles in Europe.
According to listings on the company’s website, Tesla has reduced the prices of its vehicles throughout Europe after it missed Wall Street estimates for 2022 deliveries.
This move according to the company’s CEO Elon Musk was necessitated after he warned that the prospect of recession and higher interest rates meant it could lower prices to sustain volume growth at the expense of profit.
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Also, as there is a major economic downturn such as inflation, and high energy prices ravaging global economies, Musk disclosed that it was ideal for the price of its vehicles to be reduced so as to navigate the economic downturn.
Tesla’s Model Y vehicles saw their prices slashed to $52,9000 from $65,990. It delivered a record 1.3 million vehicles in 2022, up 40% from 2021, but failed to meet wall street prediction.
In Germany, it cut prices on the Model 3 and the Model Y by between about 1% and almost 17% depending on the configuration. It also cut prices in Austria, Switzerland, and France.
In France, customers buying the Model 3 for 44,990 euros ($48,773) will now get a further price reduction through a government subsidy of 5,000 euros. The threshold for the EV scheme is 47,000.
Recall that following the price cut of its vehicles in China, Tesla owners who purchased the vehicles last year took to the street to protest after missing out on additional discounts.
These users are demanding some form of compensation from Tesla, after they disclosed that they were made to believe that there was no further discount that would be slashed, noting that many were looking to take advantage of a nationwide Electric Vehicles (EVs) subsidy that expired last year.
However, a spokesperson at Tesla disclosed that there was no plan to compensate buyers for the discount they missed.
Meanwhile, Tesla delivered a record 1.3 million vehicles in 2022, up 40% from 2021, but failed to meet wall street prediction.
In the fourth quarter of 2022, it delivered only 405,278 vehicles below analysts’ estimate of 431,000.
Also, the company’s stock plunged as much as 65% in 2022 following a decline in demand as it was faced with stiff competition in the EV industry.
Shares in Tesla have fallen 28% since October 27, when CEO Elon Musk acquired Twitter and appointed himself as the CEO of the social media company, which triggered investors’ concern.
However, Musk had disclosed that he will resign as head of Tweeted when the social media company identifies a successor.
The electric vehicle company faces falling demand amid recession fears, heightened competition, and pandemic-induced production challenges.
Moreover, some analysts and major investors have sharply criticized Musk over a perceived lack of focus on Tesla, saying the company needs leadership as it contends with an adverse business environment.
Tesla has cut prices on all its vehicles in the U.S. by up to 20% as it looks to expand its customer base nationwide. The move comes after a bigger price cut in China, which saw the cost of some models slashed by up to 40%. The company is keen to boost its sales at a time when the appetite for electric vehicles appears to be waning somewhat. Tesla’s decision to cut the basic Model Y to below $55,000 also allows buyers to receive the U.S. government tax credit of $7,500, another potential incentive for buyers. (LinkedIn News)