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Mask on the offensive: Lowered prices - Tesla cheaper by up to 20%

Mask on the offensive: Lowered prices - Tesla cheaper by up to 20%

The American manufacturer of electric cars has changed its strategy.

The American car manufacturer Tesla has reduced the prices of its electric vehicles in the US and Europe by up to 20 percent. The company's goal is to attract customers with an aggressive discount policy and improve sales results after the last results failed.

The move could have far-reaching consequences for the electric car market and, according to some analysts, fuel a price war with European and American manufacturers.

The move initially sent Tesla's stock price down 4.5 percent at the U.S. open, and came shortly after CEO Elon Musk warned that higher interest rates and a possible recession could lower prices to maintain growth at the expense of profits. .

This is a reversal from the strategy the company used in the past two years, during which orders exceeded supply.

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Reuters recalls that Musk admitted last year that prices had become "embarrassingly high" and could hurt sales.

American buyers of Tesla vehicles will be pleased with discounts ranging between 6 and 20 percent off the best-selling Model 3 and crossover Model Y, according to Reuters calculations.

The base version of the Model Y costs $52,990, compared to the previous $65,990.

In the U.S., the luxury SUV, Model X, as well as the Model S sedan, were also discounted. In Germany, the Model 3 and Model Y were reduced by between one and nearly 17 percent, depending on the equipment, and prices were also lower in Austria, Switzerland, and France. .

A new strategy of aggressive price cuts combined with subsidies could make electric cars more affordable to a much wider range of buyers than before.

For the French, for example, the Model 3 costs 44,990 euros, and in the future they will receive 5,000 euros of government incentives.

"It should really increase sales volume for 2023. It's the right move," Tesla investor Gary Black said in a tweet, remaining bullish on the company's outlook.

Some investors were concerned about the generous price cuts, fearing it would "erode" margins as competition intensified.

Mask on the offensive

However, the decision to lower prices has angered Tesla fans who have recently purchased vehicles because they feel that the discounts have put them at a disadvantage compared to new buyers, and that their used cars are now worth less.

In China, where models are 6 to 13.5 percent cheaper, vehicle owners protested at delivery centers demanding compensation.

About 75 percent of the company's total production goes to the markets of the USA and China, and sales are growing in Europe as well, which is why Tesla's factory in Berlin is increasing its capacity. Before the decision to cut prices sharply, US inventories of Tesla's electric vehicles were on an upward trajectory.

At the same time, the prices of used cars also fell, which further increased the pressure to adjust the prices of new cars.

Wedbush analyst Dan Ives believes the move could boost global orders for Tesla vehicles by between 12 and 15 percent this year, indicating "Musk is on the offensive."

"It's a clear blow to European automakers and leading US companies (GM and Ford) that Tesla won't play 'softly' with the ongoing EV price war. It will hit profit margins, but we like this strategic poker move by Musk and Tesla," he concluded.

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