Tesla has now also reduced the prices of its electric cars in the US domestic and key European markets by up to 20 percent. Earlier, the carmaker lowered all its prices in China, the primary car market in the world.
The company, led by billionaire Elon Musk, hopes to boost needs after several quarters of disappointing deliveries.
Tesla slashed the price of its cheapest model Y car in the US by 20 percent. Likewise, the price for a Model 3 was reduced by 14 percent. The price reductions also make both models eligible for the US $7,500 electric vehicle tax credit. By 2021, the US and China combined will account for about 75 percent of Tesla’s sales.
Prices have also been reduced in key European markets, including Germany, the United Kingdom and France. Teslas are also becoming cheaper in the Netherlands, Belgium, Austria and Switzerland.
The lower prices in Tesla’s key markets represent a reversal of the automaker’s strategy for much of 2021 and 2022. In that period, orders for new vehicles still exceeded supply, and the company was able to command high prices. However, Musk acknowledged last year that prices had become “embarrassingly high” and could hurt demand.
The price reductions may make the Tesla models more affordable for consumers. However, the price reductions are detrimental to those who have recently purchased a Tesla, as the second-hand value is now lower. Earlier this month, hundreds of Chinese Tesla drivers gathered in front of the car manufacturer’s showrooms and distribution centres out of dissatisfaction with the new price cuts in China.