Tesla has lowered global electric vehicle prices by up to 20%, expanding an aggressive discounting push and battling rivals after falling short of Wall Street delivery projections for 2022. The move represents a departure from the automaker’s strategy over the previous two years when new vehicle orders exceeded supply. It comes after CEO Elon Musk warned that the threat of a recession and rising interest rates meant the company would have to decrease costs to maintain expansion at the risk of earnings.
The regular Model 3 was reduced from $46,990 to $43,990, a 6% decrease, while the Model Y was reduced by 20%, from $65,990 to $52,990. The Model S decreased 10% from $104,990 to $94,990, and the Model X dropped 9% from $120,990 to $109,990. Certain models’ performance and plaid variations were also significantly reduced. For example, the Model S Plaid dropped 15% from $135,990 to $114,990.
Following a series of price cuts in Asia last week, Tesla dropped pricing across the United States, Europe, the Middle East, and Africa, in what analysts regarded as a clear strike at both smaller rivals bleeding cash and incumbent manufacturers quickly ramping up electric vehicle manufacturing.
Tesla’s stock fell 3.6 percent on Friday. Musk admitted last year that pricing had gotten “embarrassingly high,” threatening demand. The lower pricing across the United States, Europe, the Middle East, and Africa follows a series of discounts in Asia last week and represents a departure from the strategy the manufacturer used for much of 2021 and 2022 when new vehicle orders exceeded supply.
The price cuts could make electric vehicles more affordable for consumers who were previously priced out of the market. Buyers in the United States and France may be able to take advantage of both the discounts and federal tax credits available in both countries for certain electric vehicle purchases.
