Tesla extends price cuts to U.S. and Europe to boost sales

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Tesla has sharply lowered the prices of its electric vehicles in the United States and Europe, the automaker’s website shows, extending a new aggressive pricing strategy after missing Wall Street delivery estimates.

U.S. price cuts, announced late on Thursday U.S. time for the Model 3 sedan and SUV/crossover Model Y, ranged from 6% to 20% compared with pre-discount prices, according to Reuters calculations.

These cuts don’t include a federal tax credit of up to $7,500 that went into effect for many electric vehicle models in early January.

Tesla also cut prices on its Model X luxury crossover SUV and Model S sedan in the United States.

In Germany, it cut prices for the Model 3 and Model Y — its best-selling models worldwide — by 1% to nearly 17%, depending on configuration. It also lowered prices in Austria, Switzerland and France.

For a U.S. buyer of the long-range Model Y, Tesla’s new price combined with the U.S. subsidy that went into effect this month is a 31% discount. In addition, Tesla has expanded the range of vehicles eligible for the Biden administration’s tax relief.

Along with price cuts announced last week in China and other Asian markets, the move marks a shift in Tesla’s biggest markets from the strategy it followed for much of 2022, when demand was strong and average selling prices for its electric vehicles trended higher.

“This should really boost 2023 (Tesla) volumes,” Gary Black, a Tesla investor who has remained bullish on the company and its prospects through the recent sharp drop in stock price, said in a tweet. “It’s the right measure.”

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Still, some users of Tesla’s online fan forums complained that the price cuts hurt customers who had recently purchased their vehicle, leaving them with a lower-value item in the second-hand car market.

“I’m not too happy with these big price swings. A 10,000 euro rebate makes you feel like you’ve paid too much,” wrote a user on the “Tesla Drivers and Friends” forum on Friday.

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