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Tesla cuts prices in the U.S. and Europe

Discussion in 'Tesla' started by Georgina Rudkus, Jan 13, 2023.

  1. Georgina Rudkus

    Georgina Rudkus Senior Member

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    Tesla cuts prices in U.S. and Europe to stoke sales

    Tesla cuts prices in the U.S. and Europe to stoke sales after lackluster year-end deliveries
    PUBLISHED FRI, JAN 13 20233:14 AM ESTUPDATED FRI, JAN 13 20233:22 AM EST

    Lora Kolodny@LORAKOLODNY
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    KEY POINTS
    • The move in the U.S. may help Tesla qualify for more federal EV tax credits, and stoke sales volume here and abroad, after competition and interest rates increased.
    • In Europe, Tesla cut prices on its Model 3 and Model Y vehicles in Austria, France, Germany, the Netherlands, Norway, Switzerland and the U.K.
    [​IMG]
    The Tesla Model Y (left) and Model 3 electric cars at the company’s official launch event in Bangkok on Dec. 7, 2022. The Model 3 is the company’s entry-level sedan. The Model Y is categorized by some as an SUV and others as a crossover.
    Lillian Suwanrumpha | Afp | Getty Images
    Electric vehicle maker Tesla is cutting prices in the United States and throughout Europe again, according to listings on the company’s website on Thursday night in the U.S.

    Tesla did not respond to a request for comment on what motivated it to slash prices this week.


    However, the move in the U.S. may help Tesla qualify for more federal EV tax credits, and stoke sales volume here and abroad, after competition and interest rates increased.

    In Europe, Tesla cut prices on its Model 3 and Model Y vehicles in Austria, France, Germany, the Netherlands, Norway, Switzerland and the U.K.

    Reuters reported that in Germany, Tesla cut prices on the Model 3 and the Model Y from 1% to around 17%, depending on the configuration. Tesla’s Model 3 was the bestselling electric vehicle in Germany in December 2022, followed by the Model Y. The company beat out Volkswagen and its popular electric vehicle the ID.4 in Germany.

    Tesla’s Model 3 at its discounted price is comparable to Volkswagen’s entry level electric car, the ID.3.

    According to the independent EV industry researcher, TroyTeslike, the price of a new Tesla Model 3 in the U.S. has dropped between 6% and 14%, depending on configuration, and the cost of the Model Y dropped about 19%, also depending on configuration.


    The Model 3 is Tesla’s entry-level sedan. The Model Y is categorized by some as a sport utility vehicle and others as a crossover. The company also lowered prices of its more expensive, Model S sedan and falcon-wing SUV Model X vehicles in the U.S.

    Generally, EVs qualify for tax credits in the U.S., depending on what form factor or category they fall into, their efficiency and range (meaning the number of miles they can travel on a fully charged battery) as well as the manufacturers’ suggested retail price.

    The U.S. government has delayed setting new rules about sourcing of raw materials and battery components to qualify automakers for a $7,500 clean vehicle tax credit until at least the end of March 2023.

    This means that Tesla — and other EV makers — can buy parts and critical minerals from suppliers around the world for now, and still qualify for some EV subsidies. Those seeking to qualify for federal subsidies do need to complete final vehicle assembly of their electric cars in North America under current, interim rules.

    The latest round of discounts by Tesla may set the company up to reap the benefits of EV tax credits in both the near and longer term. But it also risks upsetting customers who just agreed to take delivery of new electric cars from Tesla before the end of 2022 at higher prices.

    Earlier this month, Tesla angered customers in China by slashing prices on its Model 3 and Model Y cars there after many had agreed to take delivery at higher prices before Dec. 31. Some of the customers staged protests and demanded rebates, but so far, Tesla has not relented, according to a Reuters report.

    In late December, Tesla discounted its Model 3 and Model Y cars by about $7,500 to entice customers to take deliveries before the end of the fourth quarter. Tesla also offered some U.S. customers 10,000 miles’ worth of free charging (at Tesla Supercharging stations) if they agreed to take delivery before the year’s end.

    Despite the discounts, in the fourth quarter of 2022, Tesla reported deliveries of 405,278 vehicles and production of 439,701 vehicles. The company had been telling shareholders to expect 50% in annual vehicle delivery growth over a multiyear horizon but fell shy of that annual goal and analysts’ expectations in the fourth quarter.

    Tesla now operates its first U.S. vehicle assembly plant in Fremont, California, a newer one in Austin, Texas, its first overseas factory in Shanghai, and a newer one in Gruenheide, Germany.

    The company’s production capacity should be much higher in 2023 than in previous years with those factories, but bearish analysts have voiced concerns over a possible “demand cliff.”

    Tesla is now facing more competition, higher interest rates and slower consumer spending than in recent years, Bernstein analysts wrote in a note on Jan. 12.

    They said, “We believe that many investors underestimate the magnitude of the demand challenges Tesla is facing.” However, the firm has had an “underperform” rating and price target of $150 on shares of Tesla after the company’s share price declined in recent months.

    CEO Elon Musk sold billions of dollars’ worth of his Tesla shares last year, in part to finance a leveraged buyout of Twitter for around $44 billion. Since he took over Twitter and appointed himself CEO in late October, Musk has been splitting time, and sharing some resources, between the social media business and his electric car company.

    Tesla plans to report its 2022 fourth-quarter results on Jan. 25, 2023, and should share its new outlook for the year ahead then.
     
    #1 Georgina Rudkus, Jan 13, 2023
    Last edited: Jan 13, 2023
  2. Salamander_King

    Salamander_King Senior Member

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    Didn't read the article... But so, what is the price of the least expensive M3 nowadays before tax credit?
     
  3. mikefocke

    mikefocke Prius v Three 2012, Avalon 2011

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    $37,390
     
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  4. ColoradoBoo

    ColoradoBoo Senior Member

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    Smart move...I've seen more Tesla's on the road here in the past year than EVER! My co-worker has one and we went for a spin out in the parking lot...the speed is impressive but I'd worry about so many things being electrical (including the door latches) seems to be asking for trouble.
    A Tesla is rarely practical if you only have one vehicle but could be a good commuter car as a 2nd vehicle.
    Tesla's would probably be more popular if they'd share repair data outside their company...can't believe they can get away with doing that.
     
    Georgina Rudkus likes this.
  5. Salamander_King

    Salamander_King Senior Member

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    Great!. Then with a full-fed tax credit, it is cheaper than the new 2023 Prius Prime Bese model. Humm, tempting. The only thing is that I can't get it serviced in my state. But I may have to side-by-side comparison between M3 and the cheaper Bolt option.
     
  6. bwilson4web

    bwilson4web BMW i3 and Model 3

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  7. Trollbait

    Trollbait It's a D&D thing

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    Yep. Just posted in another thread that it was $44k, but Tesla's site just refreshed on my end.

    Correction, it is $43,990. The $37,390 figure is with 'potential savings' over an ICE car. Tesla's site defaults to that savings figure when opened.
     
  8. bwilson4web

    bwilson4web BMW i3 and Model 3

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    Tesla price cuts will decimate the 'honorable' competition ... both EV and ICE.The long wait times will motivate the new factories to 'get in gear' and 'optimize the existing ones.'

    Bob Wilson
     
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  9. Salamander_King

    Salamander_King Senior Member

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    Yep, that's what I found out now. For me, the price says $35,390 because they included the state incentives in the figure. But it is very misleading that it is not the cost of the car. The price tag on the least expensive Tesla car (M3 RWD) is $43,990 as @Trollbait pointed out.

    upload_2023-1-13_11-45-42.png

    The "potential" saving they subtracted on what appears to be the price tag includes the absurd cost of gasoline saved. Nope, I don't drive 10K miles, and our gas no longer costs $4.18/gal. It is getting better at $3.30/gal. I don't have a gasser that gets 30 MPG. My previous PP got 65mpg on gas only. Our current Escape can easily get 40MPG in town. And our electricity is not as cheap as they wish to be at $0.14/kWh. It's more like double that at $0.28/kWh.

    upload_2023-1-13_11-50-17.png

    Looks like the best I can get is $43,630 + wall connector $350. Plus tax. After the $7500 fed tax credit, it will still be a $39,009 total cost. Too expensive for me as a second car for mainly around-town rides only.
    upload_2023-1-13_11-55-7.png
     
    #9 Salamander_King, Jan 13, 2023
    Last edited: Jan 13, 2023
  10. bwilson4web

    bwilson4web BMW i3 and Model 3

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    Tesla does take trade ins after you put your deposit in.

    Bob Wilson
     
  11. Salamander_King

    Salamander_King Senior Member

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    I have nothing to trade in any more. It would be interesting to see what value they would offer for the 2021 PP Ltd I just traded in for an Escape PHEV. I have a feeling their offer is not going to be as high as the local dealer's due to the shipping cost they have to incur.
     
  12. 3PriusMike

    3PriusMike Prius owner since 2000, Tesla M3 2018

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    With the vast and still growing Supercharger network Tesla's are much better than a commuter car.

    For a while you could download the Tesla service manuals for free. Not sure if this is still true.

    https://www.reviewgeek.com/118641/go-download-teslas-free-service-manuals-while-you-can

    Certainly you can buy the manuals for an independent repair shop.

    Mike
     
  13. John321

    John321 Senior Member

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    Good decision to cut prices that will probably help the consumer and in the end help Tesla and its image.
     
  14. Trollbait

    Trollbait It's a D&D thing

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    Well, the stated reason for the price increases was because of demand, and they were aimed at reducing wait times. Some will spin the reduction as Tesla in trouble, when it could be because they have sorted out logistics and manufacturing to ramp up production for a climb in demand.
     
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  15. mikefocke

    mikefocke Prius v Three 2012, Avalon 2011

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    Correction acknowledged and appreciated.
     
  16. mikefocke

    mikefocke Prius v Three 2012, Avalon 2011

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    Don't need to have an account. Just change your zip code. Quite friendly as you can specify your desired configuration of paint, wheels, etc.
     
  17. vvillovv

    vvillovv Senior Member

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    Not that it'll make a big difference to most people, since most wouldn't know or care, tesla is also using Lifepo4 prismatic cells in some of their model.
     
    #17 vvillovv, Jan 14, 2023
    Last edited: Jan 14, 2023
  18. Georgina Rudkus

    Georgina Rudkus Senior Member

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    The reduction in price means that of those owners with cars from previous purchases have reduced re-sale value.

    That being so, there is less incentive for financed owners to sell them; that being because many will be underwater in their loans.
     
  19. hill

    hill High Fiber Member

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    .... and which manufacturers / models would that not happen to?
    .
     
  20. Georgina Rudkus

    Georgina Rudkus Senior Member

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    Those cars that maintain their resale value and those loan providers that provide only conservative loans.