Tesla has announced price cuts on its two most popular models in the United States and Europe by as much as 24 per cent in an effort to spur falling demand.
Increased competition
The move comes as Tesla attempts to fend off competition from rivals in the global electric vehicle market and follows on from last year's hikes that saw the firm raise its prices, ostensibly in response to a combination of curtailed production due to the global semiconductor shortage and high consumer demand. Prices, the company's CEO, Elon Musk said last year, had become "embarrassingly high" and that future demand could be affected as a result.
With supply-chain tensions easing, however, and the cost-of-living crisis denting previously buoyant demand for expensive electric vehicles, Musk, it seems, has been proven right, with things having changed for Tesla in the past few months, prompting an about-face on its pricing.
"As local vehicle production continues to increase and we gain further economies of scale globally, we are making Model 3 and Model Y even more accessible across EMEA [Europe, the Middle East and Africa]," the company said in a statement.
Revised Irish Tesla pricing
As a result of the price cuts, the entry point for Tesla's Model Y crossover is now €46,990, down from €59,450. The Model 3 saloon now starts from €44,990.
Following the changes, a number of versions of both models - the Model 3 Rear-Wheel Drive, Model 3 Long Range, Model Y Rear-Wheel Drive and Model Y Long Range - now qualify for the SEAI's plug-in grant worth €5,000 towards the cost of a new EV. The upper price limit for the grant is €60,000.
Stock market response
Tesla's decision to cut prices prompted a 3.8 per cent fall in the firm's share price on the Frankfurt stock exchange and comes after Musk recently reiterated that the prospect of recession and higher interest rates meant it could lower vehicle pricing to sustain volume growth at the expense of profit.
Europe and the United States aren't the only regions that have seen the Californian car-maker cut its prices lately. Last week, the firm reduced prices in China, several other major Asian markets and Australia, too. Stock of finished Tesla models has been increasing in several markets including the US and UK in recent months in response to falling demand, prompting a significant fall-off in the value of second-hand models.