Tesla has slashed the prices of its Model 3 sedan and Model Y SUV between 6% and 20% in the US, as it reverses strategy after demand tapers
Tesla has slashed the prices of its Model 3 sedan and Model Y SUV between 6% and 20% in the US.
The EV maker also slashed prices in Europe — including Germany and France.
The price cuts are a reversal from 2022, when Tesla hiked prices several times amid supply chain disruptions.
Tesla buyers in the US and part of Europe can now rejoice — the electric vehicle, or EV, is now cheaper by up to one-fifth of its cost.
The price cut mirrors those in other markets, after the EV maker missed market expectations for deliveries in the fourth quarter.
Prices of the Model 3 sedan and Model Y SUV were slashed on Thursday. The discounts range from 6% to 20%, per Reuters' calculations.
The price of a dual motor all-wheel drive Model 3 is now $53,990 in the US — 14% cheaper than the previous price tag of $62,990. Meanwhile, the long range Model Y now costs $52,990 — a 20% price cut from its sticker price of $65,990 previously.
The prices are before a $7,500 tax credit on new EVs that is part of the Biden administration's Inflation Reduction Act, passed in August last year.
Tesla also slashed EV prices in the European markets like Germany, Austria, Switzerland, and France, per Reuters. The price cuts for the the Model 3 and Model Y in Germany range between 1% to 17%, the news agency reported.
The carmaker's latest price cuts came after similar moves in China, Japan, South Korea, and Australia, in a bid to boost demand for cars made in Tesla's Shanghai factory, Reuters reported last week, citing a person with direct knowledge of the plan.
The discounts are a reversal from Tesla's earlier strategy in 2022, when the EV maker hiked prices several times amid supply chain disruptions, even though there were concerns about a broader economic slowdown.
While Tesla delivered a record 1.3 million EVs in 2022, its deliveries fell short of market estimates in the fourth quarter of the year, disappointing investors who were already concerned that CEO Elon Musk was spreading himself too thin after his $44 billion acquisition of Twitter. Musk is also the new CEO of Twitter.
At the end of 2022, Tesla was offering a rare $7,500 discount on its Model 3 and Model Y vehicles. The discount expired in December.
Wedbush analyst Dan Ives said in a note last Wednesday that Tesla faces "a fork in the road" in 2023 as it faces increasing competition and lower demand.
Tesla's share price is down 64% from a year ago. They were 4.8% lower at $117.75 apiece in after hours trade on Friday.
Tesla did not immediately respond to Insider's request for comment sent outside regular business hours.
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