Tesla reduces prices by up to 20% in the United States and Europe

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Tesla is lowering pricing in Europe and the United States. According to Reuters, pricing for a Model Y rear wheel drive have fallen by 17% in Germany, and by 20% in the US for the Model Y extended range. Tesla has also reduced the price of its Model X and Model S in the United States. The price decreases come less than a year after Tesla raised prices numerous times in 2022.

“At the conclusion of a tumultuous year with supply chain hiccups, we have achieved a partial stabilization of cost inflation, giving us the confidence to transmit this relief onto our clients,” a Tesla Germany spokeswoman tells Reuters.

With today’s improvements, the costs of the Model 3 and Model Y are now lower than they were before Tesla’s initial significant price rises over a year ago. EV researcher Troy Teslike has produced a list of pricing revisions in the United States, with the Model Y extended range now $13,000 less expensive before the tax credit and $20,500 less expensive with the credit. After the tax credit, that’s a total reduction of 31%.

While some aspects of the 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 popular Model Y weren’t eligible. Tesla CEO Elon Musk initially called the disqualification “messed up” in a tweet replying to a Tesla fan comparing a plug-in hybrid Jeep to the Model Y.

Tesla’s own discounts are clearly designed to push sales across Europe and in the US. Reuters reported earlier this month that Tesla’s quarterly deliveries fell short of market estimates, due to logistical issues and concerns around demand.


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