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New York: Tesla announced Friday that it will cut the price of its best-selling electric car models by up to 20 percent in Europe and the United States, launching a price war as more competitors enter the market.
Shares in the company owned by Elon Musk fell for more than a year and fell as much as 4.5 percent in early trading Friday, before recouping some losses.
“It’s no secret that demand for Tesla is starting to record some cracks in this global slowdown of 2023,” said analyst Dan Ives of Wedbush Securities.
correct movement
Nevertheless, Ives noted that lowering the price was “the right move” and a cautionary step for European automakers and US companies General Motors and Ford to ensure that Tesla will not stand by in the face of growing competition.
Tesla has already cut prices twice in China in recent months, and ran rare promotions in North America late last year.
According to posts on social media, the price cut in China prompted Tesla owners to express their anger at auto showrooms because they missed offers on these vehicles.
In 2022, the group delivered 1.31 million electric vehicles, an increase of 40 percent year-on-year.
deliveries
But that’s still short of Musk’s long-term goal of increasing deliveries by 50 percent annually.
Investors worry that sales will slow due to the economic downturn as well as higher interest rates, which make it more expensive to borrow money to buy a car.
Observers also point to the arrival of plenty of competitors in the electric vehicle market, with major automakers now offering a range of models, including the luxury segment long dominated by Tesla.
According to the Wall Street Journal, the discount now enables buyers of a Tesla Model Y (“Y”) to take advantage of a tax incentive in the United States by selling the car for less than $55,000.