Why Is Tesla Slashing Prices? Is Now the Right Time to Buy a Tesla?
Reading Time: 3 minutesTesla prices are falling, making ownership more achievable than ever before. So, is it time to buy?
Tesla has been at the forefront of electric vehicles since its 2008 launch. In the 15 years since, many established car brands have caught up and now offer the carmaker fierce competition.
Tesla is now undergoing major changes both in terms of prices and product perception and has cut its prices by up to a fifth across the US and Europe. This has been a controversial move so far, but is it the right one?
Why Is Tesla Cutting Its Prices?
According to Tesla, prices are being cut to further increase demand in the face of rising competition and economic slowdowns in the US and Europe. The latest drop comes just days after Tesla cut its prices in China, which has led to ill-feeling from customers who bought their cars at a higher price and have now seen a sudden drop in value.
Slow global growth, higher interest rates, and increasing competition from established carmakers who are now entering the electric vehicle space, especially Chinese brands, are all part of the reason for these price cuts. In addition, Tesla itself is moving from a niche premium product to a mass-market manufacturer now.
Additionally, the semiconductor shortage and supply chain issues caused by COVID-19 have also hit the company, especially considering how much its cars rely on computers. Tesla deliveries rose by as much as 40% in 2022, but that wasn’t what the market expected.
The demand for electric vehicles has risen steadily amidst rising fuel prices and increasing concerns about climate change. However, when competing in a market with a quickly diminishing buyer pool and an increasing number of manufacturers going head to head, Tesla just can’t afford to keep charging high for its cars.
The demand for Teslas has also usually exceeded supply, mostly thanks to its Autopilot features and just straight-up better performance compared to other electric cars. Since it doesn’t operate in a conventional dealership model and sets prices centrally, it isn’t anything new for Tesla to introduce a sudden price change.
All things considered, this is a rather offensive move from Tesla to maintain at the top of the electric car market. However, the company has addressed this move as a response to falling costs from moving components closer to factories as well as supply chain improvements.
How Low Have Tesla Prices Dropped?
According to price changes on its website, Tesla has cut prices by as much as $13,000 across its entire lineup in the US. The Model 3 and Model Y start at $43,990 and $52,990 at the time of writing, and certain new models are eligible for the $7,500 Federal Tax Credit.
As for the UK, the prices for the Model 3 and Model Y have dropped between £3,500 and £8,000. This has put the entry-level price of a Tesla Model 3 and Model Y at £42,900 and £44,900, respectively. Keep in mind these were already the two most affordable vehicles in the company’s lineup.
This comes on the heels of the company reducing prices twice in China in the last six months. Tesla prices in China are between 13% to 24% lower than they used to be in September 2022.
Additionally, the company is also offering freebies in countries where it hasn’t slashed prices. For example, Irish customers now get the black paint option for free. For context, only white was available as a free option previously, with other colors costing extra.
Is It the Right Time to Buy a Tesla?
For the most part, yes. The price cuts are expected to increase the company’s orders by as much as 15% in 2023. So if you’ve been looking for a Tesla, now would be a good time to get your pre-order in, especially since the company has announced that customers who have pre-ordered their vehicles but haven’t received them yet will be paying the new, lower prices.
This is the lowest Tesla prices have been in the last two years. Sure, you might have to pay extra to access features like Full Self-Driving, but all things considered, it’s a pretty good time to get into the Tesla ecosystem, especially with the Model 3 or Model Y.
Charge Into the Future
With Tesla prices being down, their lower cost of running thanks to Tesla’s supercharger network is now a bigger advantage than ever. Depending on where you live, the price cuts, in addition to the comparatively lower charging costs, can make driving quite the experience.
Reference: https://www.makeuseof.com/why-is-tesla-slashing-prices/
Ref: makeuseof
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