Tesla Slashes Prices by 20% in US and Europe Sparking Electric Vehicle Price War
Tesla has taken a bold step to boost sales by cutting prices of its vehicles by up to 20% in the US and Europe. The company has cited the economic slowdown and increasing competition from established brands as the reasons behind this move.
According to industry experts, this is the lowest prices have been in the last two years and the cuts are a result of falling supply chain costs and cost-saving measures such as shifting components closer to factories. This move comes days after Tesla reduced prices in China, which led to complaints from customers who had pre-ordered vehicles at higher prices or saw their cars lose significant value overnight.
To avoid similar backlash, Tesla in Europe has announced that it will provide price cuts to customers who have already ordered vehicles. In the US, prices have been cut by up to $13,000 across the entire model range, making some models up to 20% cheaper. In the UK, the Model 3 and Model Y, the most affordable vehicles in the line-up, saw a drop of between £3,500 and £8,000 overnight.
This move comes at a time when shares in the company have fallen more than two-thirds in the past year due to concerns over slowing demand, while competitors such as Volkswagen and Hyundai are seeing a sharp rise in their sales of electric vehicles. Dan Ives, an analyst at Wedbush, called the cuts a “smart move” and predicted that it could raise demand by up to 15% in the coming year.
Fiona Howarth, CEO of Octopus Electric Vehicles, said the cuts would make Tesla’s cars “increasingly affordable” and called on other suppliers to follow suit. Tesla, which sets prices centrally, periodically raises or lowers prices as demand and supply fluctuate. With the auto industry bracing for an economic slowdown, this move could not have come at a better time for Tesla as they look to maintain their position as the leader in the electric vehicle market.
