Photo: Tesla | Edited
Although not everyone agrees, Tesla engaged in a price war that is here to stay for the long run, becoming a weapon of choice in fending off competition. One week after the EV maker slashed prices in the US, Tesla made a similar move in Europe, undercutting Volkswagen and other competitors.
Tesla reported impressive sales and delivery results in the first quarter of the year, fueled by the price cuts it operated in January. Still, not all models enjoyed the same success, with the Model S sales particularly disappointing. We predicted that more price adjustments would follow to address this issue, and Tesla obliged on April 6. The EV maker slashed $5,000 off the Model S and Model X prices in the US, but also reduced the Model 3 and Y prices by $1,000 and $2,000, respectively.
This aggressive pricing strategy was expected to extend to other markets. With China already enjoying the lowest Tesla prices in the world, our eyes turned to Europe, and we didn't have to wait very long. Tesla quietly cut the prices of its models in Europe just a week after it made the same move in the US. The Model S and Model X also benefitted from the adjustment.
The prices went down across the board, as reported by Esther Kokkelmans, who follows the main European markets, China, and US. Not all countries saw the same cuts, but the reduction is significant. In Germany, Model S and Model X are €10,000 ($11,000) cheaper, starting at €102,990 ($114,000) and €110,990 ($123,000). The Model Y Performance is €4K cheaper, while the Model 3 Performance costs €6K less. The Model RWD is €2K more affordable, starting at €41,990, while the Model 3 AWD is €50,990, or €3K cheaper than before.
Tesla prices vary slightly across Europe, but similar price adjustments were reported throughout the European bloc, as well as in Singapore and Israel. The move would undoubtedly help Tesla accelerate sales and put tremendous pressure on its archrivals. Volkswagen is particularly affected, as its affordable electric model, the ID.3 (€40K in Germany), is seriously outperformed by the Tesla Model 3. Depending on the market and the availability of the cheapest trims, the Volkswagen ID.3 is either more expensive or marginally cheaper. The same is true for other European EV models, like Renault Megane E-Tech, which starts at €42K in Germany.
As much as Tesla investors hate cutting prices, the American carmaker can afford it. Some argue that this crashes the value of used vehicles, affecting owners who try to sell their cars. It also diminishes Tesla's status as a luxury carmaker as prices drop and volumes increase. Although many want Tesla cars to remain a premium product, Elon Musk's masterplans speak about extreme scale, hinting that Tesla vehicles will become more affordable.
"Our mission is to accelerate the transition to renewable energy. Our masterplan has set a clear pathway to achieve that mission: the transformation of cost-intensive small-series products to cheaper mass-series vehicles," Tesla told Automotive News Europe.
This aggressive pricing strategy was expected to extend to other markets. With China already enjoying the lowest Tesla prices in the world, our eyes turned to Europe, and we didn't have to wait very long. Tesla quietly cut the prices of its models in Europe just a week after it made the same move in the US. The Model S and Model X also benefitted from the adjustment.
The prices went down across the board, as reported by Esther Kokkelmans, who follows the main European markets, China, and US. Not all countries saw the same cuts, but the reduction is significant. In Germany, Model S and Model X are €10,000 ($11,000) cheaper, starting at €102,990 ($114,000) and €110,990 ($123,000). The Model Y Performance is €4K cheaper, while the Model 3 Performance costs €6K less. The Model RWD is €2K more affordable, starting at €41,990, while the Model 3 AWD is €50,990, or €3K cheaper than before.
Tesla prices vary slightly across Europe, but similar price adjustments were reported throughout the European bloc, as well as in Singapore and Israel. The move would undoubtedly help Tesla accelerate sales and put tremendous pressure on its archrivals. Volkswagen is particularly affected, as its affordable electric model, the ID.3 (€40K in Germany), is seriously outperformed by the Tesla Model 3. Depending on the market and the availability of the cheapest trims, the Volkswagen ID.3 is either more expensive or marginally cheaper. The same is true for other European EV models, like Renault Megane E-Tech, which starts at €42K in Germany.
As much as Tesla investors hate cutting prices, the American carmaker can afford it. Some argue that this crashes the value of used vehicles, affecting owners who try to sell their cars. It also diminishes Tesla's status as a luxury carmaker as prices drop and volumes increase. Although many want Tesla cars to remain a premium product, Elon Musk's masterplans speak about extreme scale, hinting that Tesla vehicles will become more affordable.
"Our mission is to accelerate the transition to renewable energy. Our masterplan has set a clear pathway to achieve that mission: the transformation of cost-intensive small-series products to cheaper mass-series vehicles," Tesla told Automotive News Europe.
— Esther Kokkelmans (@EstherKokkelman) April 14, 2023
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