Tesla cuts EV prices in Europe, others

Oluwanifemi Ojo
Oluwanifemi Ojo
Elon Musk

Tesla has reduced the prices of its electric vehicles in Europe, Israel, and Singapore, which has sparked concerns about its industry-leading profit margin.

According to Reuters, the move is part of the global discount drive it started in China in January to boost demand.

Despite offering discounts in countries like the United States, China, Japan, Australia and South Korea aimed at spurring demand, Tesla reported a mere 4% increase in deliveries in the first quarter of the year.

The automaker has reduced prices five times this year, including a recent cut in the US market in response to tougher standards that will limit EV tax credits.

However, Tesla failed to meet its Chief Executive Officer, Elon Musk’s delivery target of 50% growth in 2022, limiting it to a 40% increase due to logistical problems and slowing demand.

Tesla has lowered the prices of its Model 3 and Model Y vehicles in various European markets, including Germany and France, citing improvements in its production capacity as the reason.

In Germany, this is the second time the automaker has reduced prices this year, with reductions of between 4.5% and 9.8%.

The price cuts in Singapore ranged from 4.3% to 5%, while in Israel, the base rear-wheel drive Model 3’s price has been slashed by 25% after an initial round of global price cuts in January.

Tesla has reduced the prices of its base Model 3 and Model Y in the US market by 11% and 20%, respectively, since the beginning of this year.

Tesla’s CEO, Elon Musk, has emphasized the company’s focus on bringing prices down to increase demand, and the January discounts were successful in attracting orders.

According to him, “Tesla would focus on bringing prices down to drive demand and that it had seen success in sparking orders with January’s discounts.”

Meanwhile, Tesla is set to report its first-quarter results in the forthcoming week.

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