SINGAPORE: Tesla Inc. reduced the cost of its electric vehicles on Friday in Europe, Israel, and Singapore, continuing a global discounting campaign that started in China in January. However, this move by the car manufacturer raises questions about its top profit margin in the industry.
Despite offering discounts in the United States, China, Japan, Australia, and South Korea in an effort to increase demand, Tesla said last week that first-quarter deliveries were only up 4% from the previous quarter.
Tesla announced its fifth vehicle price cut this year in the US market due to stricter regulations restricting EV tax credits. A 40% increase instead of a 50% growth was achieved in 2022, falling short of CEO Elon Musk’s delivery objective due to logistical challenges and sluggish demand.
Due to scaling up and improvement in its production capacity, Tesla claimed on Friday that it had reduced prices in many European regions, including Germany and France.
Tesla has reduced the cost of its Model 3 and Model Y vehicles in Germany by between 4.5% and 9.8%, according to data posted on its website on Friday. This is the company’s second price cut of the year after a 1-17% reduction in January.
As stated by details on their webpage, Tesla has reduced the cost of its Model 3 in Germany by 2,000 euros, or 4.5%, to 41,990 euros ($46,462) per vehicle. The cost of the performance and long-range versions of the Model 3 was also reduced by the automaker. With a 9.8% price reduction from the prior asking price, the Model 3 Performance model is now available for purchase for 54,990 euros.
Tesla recently reduced the cost of the Model Y Performance by 9.2% to 60,990 euros. The cost of the Model Y Long Range and Rear Wheel Drive stayed the same.
According to information on its regional website, it reduced the cost of its Model 3 and Model Y vehicles in Singapore by 4.3% to 5%. Following a first round of worldwide price reductions in January, Tesla likewise reduced pricing in Israel, with the base rear-wheel-drive Model 3’s price falling by 25%.
In order to increase demand, Musk has stated that Tesla will concentrate on lowering pricing. He also noted that the company’s January sales had been successful in generating orders.
Since the beginning of the year, Tesla has reduced the price of its base Model 3 by a total of 11% in the US while also offering a 20% discount on its base Model Y.
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