Tesla cuts prices in key markets

Tesla has lowered its prices in key markets, including China, Germany and the US. Tesla models in China are now around 2,000 dollars cheaper, while the carmaker announced similar price reductions in the US on Friday.

First to China: Tesla models now cost about 2,000 dollars less. The new prices apply to the Model 3 and Model Y manufactured in Giga Shanghai as well as to the imported Model S and Model X series. In China, the Model 3 with rear-wheel drive is available from 213,900 yuan, which is currently about 29,529 dollars. That is a price drop of about 5.6 per cent compared to the previous price tag of 245,900 yuan, CN EV China reports.

In the US, Tesla has already announced price cuts ahead of the weekend- for the Model Y, Model S and Model X. The prices for the Model 3 and the Cybertruck have not changed in the US. However, the FSD driver assistance software has become $4,000 cheaper across all model series there, meaning the feature still costs an additional $8,000.

In Germany, the entry-level price for the Model 3 has been reduced by €2,000 to €40,990, while the long-range variant is also €2,000 cheaper. Tesla now offers certain variants of the Tesla Model Y in Germany with zero per cent financing.

Elon Musk commented on the latest price changes on X – albeit with a more general statement on Tesla’s pricing strategy:

“Other cars change prices constantly and often by wide margins via dealer markups and manufacturer/dealer incentives. Only a fool thinks the ‘MSRP’ is the real price. Tesla prices must change frequently in order to match production with demand.”

Tesla kicked off a price war in China in 2023, causing many other carmakers to slash prices there. While that may have caused demand to rise, the financial result for 2023 showed Tesla’s margins were dropping and that the carmaker was losing money as a result.

This comes as the carmaker is dealing with toppling deliveries. In Q1/2024, the carmaker delivered 386,810 EVs, which is the lowest delivery quota since the end of 2022. Moreover, Elon Musk is said to have cut funding for the planned compact (and more affordable) model while focusing on the company’s Robotaxi.

All that is also overshadowed by a wave of layoffs. According to media reports, the global workforce will be reduced by about 10 per cent. The first managers have already had to clear their desks, while staff in, for example, Giga Berlin in Grünheide could be informed as of today whether their contracts with the company will continue – or not.

reuters.com (overview), cnevpost.com China), twitter.com (Musk)