- Tesla has cut prices on its Model Y cars across Europe shortly after announcing similar price cuts on its Model 3 and Model Y cars in China.
- Tesla reduced the prices of its Model Y cars in Germany by up to 8.1%, according to its website, while the company made similar reductions in France, the Netherlands and Norway.
- Tesla shares fell 1.6% in pre-market trading in the United States.
Tesla late Tuesday reduced the prices of its Model Y vehicles in several European countries, a week after it announced similar price cuts for its Model 3 and Model Y vehicles in China.
The company reduced the prices of its cars sold in Germany, France, Norway, and the Netherlands, according to the company’s local websites in each of those markets.
In Germany, the rear-wheel-drive Model Y now retails for €42,990 ($46,760.65), which represents a roughly 4.2% discount on the car’s previous retail price. The Model Y Long Range is now priced at €49,990, down 8.1% on the previous price, while the rear-wheel drive Model Y is priced at €42,990, down 4.2%.
In France, Tesla reduced the prices of its Model Y cars by up to 6.7%, and in the Netherlands, Tesla reduced the prices of its Model Y cars by up to 7.7%. In Norway, the company reduced prices by 5.6 to 7.1%.
Tesla shares fell 1.6% in US pre-market trading.
The cuts come after Tesla announced price cuts for its Model 3 and Model Y cars in China. Over the past year or so, the company has been aggressively reducing the prices of its cars in China, undermining local rival BYD.
According to JL Warren Capital, Tesla has reduced Model 3 prices by 6% compared to December last year, and has also reduced Model Y prices by 11%.
Tesla’s operations in Germany have been affected by unrest in the Red Sea after the Iran-backed Houthi movement launched attacks on ships crossing a key route, wreaking havoc on global trade and sparking international criticism.
As a result of the unrest in the Middle East, Tesla said last week that it would stop production of most vehicles at its factory in Berlin-Brandenburg, citing a shortage of components due to changes in transportation methods.
Competition in the electric vehicle market has intensified over the past year, with Tesla pitted against a large number of other automakers. BYD, the Chinese automaker backed by legendary investor Warren Buffett, will unseat Tesla as the world’s largest electric vehicle maker in 2023.
Volkswagen has overtaken Tesla as the king of electric vehicles in Germany, surpassing the US automaker last year with a 13.5% market share compared to Tesla’s 12.1% share, according to Germany’s federal automobile authority KBA.
Germany and France are the largest EV markets in Europe, and Norway is also an important market.
Tesla’s new price cut comes even as Tesla Berlin prepares to suspend production for two weeks starting January 29, which the electric vehicle giants say is due to problems with parts caused by delivery problems in the Red Sea.
The price cuts will add to concerns that Tesla’s earnings will continue to decline in 2024.
Tesla has already offered deep discounts on Model Y inventory in Europe, so actual selling prices won’t drop as much as the new discounts suggest. But the previous price decline was followed by a renewed decline in inventories.
Tesla shares fell 2% to 215.55 after hitting a two-month low during the day. Shares rose 0.5% to 219.91 in Tuesday trading, heading higher. TSLA shares are below their moving averages after four straight weekly declines, including a 7.8% decline last week.
Tesla China Price Cuts
On Friday, Tesla cut prices for the Model 3 in China by 3.9% to 5.9% and for two Model Y variants by 2.1% to 2.8%. The decline in Model 3 prices was partially offset by the end of insurance support for purchases of Model 3 inventory.
Chinese electric vehicle makers Li Auto (LI) and Nio (NIO) announced big discounts on 2023 models last week ahead of the 2024 model facelift.
Last week, electric vehicle giant BYD (BYDDF) announced major discounts in Germany. BYD, which overtook Tesla in producing all-electric cars in the fourth quarter, has raised prices for its vehicles in Germany and other European countries.
Lee’s shares fell 3.8% on Wednesday, hitting their lowest level in seven months. Nio shares fell 3.8% to their lowest price since mid-2020, after falling 8.65% on Tuesday. Shares of BYD, which showcased driver assistance systems and other smart car technologies on Tuesday, fell 4.1%, hitting a 10-month low.