Tesla has reportedly slashed prices for its electric vehicles by up to 20% globally, extending an aggressive discounting strategy and challenging rivals after missing Wall Street’s 2022 delivery estimates.
The move, Reuters said, which sent Tesla shares down 5.6%, came after CEO Elon Musk warned of a recession and higher interest rates meant prices could be cut to support volume growth at the expense of the economy maintain profit.
Musk acknowledged last year that prices have become “embarrassingly high” and could hurt demand.
Lower prices in the US, Europe, the Middle East and Africa after a series of cuts in Asia last week mark a reversal of the strategy the automaker had followed for much of 2021 and 2022, when new-car orders weighed on supply exceeded.
A reduction in cost inflation was also a factor in the price drop in Europe’s high-end market, a Tesla Germany spokesman told Reuters, without specifying which costs fell.
U.S. price cuts for the world’s top-selling Model 3 sedan and Model Y crossover SUV ranged from 6% to 20%, Reuters calculations showed, with the base Model Y now costing $52,990 compared to $65,990.
That’s ahead of a federal tax credit of up to $7,500 that went into effect on many electric vehicles in early January.
Tesla also cut prices for its Model X luxury crossover SUV and Model S sedan in the United States, the news outlet report added.
