Tesla has announced price cuts for its electric vehicles (EVs) in the US and Europe, with reductions of up to 20 percent. According to Reuters, prices for the Model Y rear-wheel drive have dropped by 17 percent in Germany, while the Model Y long range has seen a 20 percent cut in the US. Tesla has also lowered the prices of its Model X and Model S in the US. The price cuts come less than a year after Tesla raised prices multiple times in 2022.
Tesla drastically lowers EV pricing in the US and Europe
A Tesla Germany spokesperson said in a statement to Reuters that the company has achieved “a partial normalization of cost inflation” and wants to pass the relief on to customers. The changes mean that the prices of the Model 3 and Model Y are now below the prices they were listed at before Tesla’s initial price hikes almost a year ago.
EV researcher Troy Teslike has compiled a list showing the price changes in the US, with the Model Y long range now $13,000 cheaper before the tax credit and $20,500 cheaper including the credit, which is a total of 31 percent cheaper after the tax credit. While some aspects of EV tax credits will be delayed until March, the new rules mean EVs should be more affordable in the US, depending on where cars are built, where batteries are assembled, and where materials for those batteries are sourced from.
The price cuts also mean that the five-seater version of the Model Y will now qualify for the $7,500 federal tax credit. Before the cut, the IRS released a list of vehicles that would qualify for the new incentive, and five-seater versions of Tesla’s Model Y were not included. Tesla CEO Elon Musk initially criticized the disqualification in a tweet replying to a Tesla fan who compared a plug-in hybrid Jeep to the Model Y.
Tesla’s discounts are clearly designed to boost sales in Europe and the US. As reported earlier this month, Tesla’s quarterly deliveries fell short of market estimates due to logistical issues and concerns around demand.
Tesla is the best-selling luxury car brand in the US, with 22% market share and strong growth in EV market.
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