This latest price cut by Tesla is becoming a trend and it represents almost the third time the firm will be slashing its car prices around the world.
American multinational electric vehicle maker Tesla Inc (NASDAQ: TSLA) has slashed the prices of its vehicles in the United States, and other key markets in Europe. As reported by CNBC, the price slash extends to its pricing in the United Kingdom, Austria, France, Germany, the Netherlands, Norway, and Switzerland.
The price slash ranges from 1% to 17% depending on the specification of the car, as highlighted by Reuters, giving reference to the Model 3 and Y vehicles in Germany. Tesla’s Model 3 remains one of the top-demanded vehicles in Germany and the current price slash may position the company right to further beat existing competitors like the Volkswagen ID.4.
The motive for slashing the prices is notably uniform across the board and it all boils down to attracting new buyers at a time when more competing electric vehicle makers are introducing cheaper cars into the market. Tesla is notably facing a significant headwind as to reducing demand across the board
The company delivered a total of 405,278 vehicles in the fourth quarter even though it produced a total of 439,701 vehicles. The price slash may change the narrative for Tesla as independent EV market researcher Troy Teslike shared that the price of the Model Y is now $13,000 cheaper before the tax credit and $20,500 cheaper including the tax credit.
There are speculations that the price slashes will help Tesla secure some form of the tax credit, one major incentive it has relied on to maintain market dominance. With retail pricing one of the crucial factors that is considered to offer this EV tax credit, The Tesla move now appears to be a smart one for both the company and its customers alike.
Tesla and Price Slashes: a Growing Trend
This latest price cut by Tesla is becoming a trend and it represents almost the third time the firm will be slashing its car prices around the world. As Coinspeaker reported earlier this month, Tesla effectively slashed prices in China on its Model 3 and Model Y.
While this move is designed to help attract customers, the price slashes have resulted in what looks like the opposite of its desired goals. Some customers in China are reportedly protesting after taking deliveries of their vehicles at a relatively higher rate compared to when the price slashes were implemented.
Unless Tesla is able to correctly find a way to appease customers and increase its demand across the board, its shares may continue to suffer in the aftermath of all these unsettled changes. According to a note to investors from Bernstein Analysts on Thursday, Tesla is facing more competition with higher interest rates and slower consumer spending than in recent years.
“We believe that many investors underestimate the magnitude of the demand challenges Tesla is facing,” they said, giving Tesla an “Underperform” rating and a price target of $150. At the time of writing, Tesla shares are changing hands at $117.81, down 4.65% in the Pre-Market.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.