Tesla cuts electric car prices across Europe and the US to Bolster demand

Tesla has cut prices by up to a fifth across the US and Europe to bolster demand for its electric vehicles in the face of an economic slowdown and fiercer competition from established brands.

The electric car maker said the cuts, which industry figures say take prices to their lowest level in two years, were in response to falling supply chain costs, as well as lower costs from shifting components closer to factories.

The latest drop comes days after price reductions by the brand in China, which sparked complaints from customers who had pre-ordered vehicles at higher prices or saw their cars lose significant value overnight.

Some Tesla customers Protested against the Chinese cuts outside showrooms in Shanghai, Wuhan and Shenzhen earlier this month.

Tesla in Europe has attempted to head off any similar criticism by saying it will pass along price cuts to customers who have already ordered vehicles.

In the US, Tesla cut prices by up to $13,000 across its entire model range, reducing the price of some models by up to a fifth, according to changes on its website.

Prices in the UK for the Model 3 and Model Y — the two most affordable vehicles in its line-up — dropped by between £3,500 and £8,000 overnight, according to industry figures and prices listed on Tesla’s website.

Tesla said the cuts take the entry-level cost of a Model 3 in the UK to £42,900, with the higher-riding Model Y cut to £44,900.

Other alterations have reduced prices, such as offering black paint for free in Ireland. Previously only white was included, with other colors costing extra.

The move comes as shares in the group have fallen more than two-thirds in the past year over concerns about slowing demand, just when the company opened factories in Berlin and Shanghai, and rivals including Volkswagen and Hyundai are seeing sharp rises in their sales of electricvehicles.

The group, which does not operate through traditional dealerships but sets prices centrally, periodically raises or lowers prices as demand and supply fluctuate.

It has been steadily raising its prices in recent months because of the strength of demand globally for electric cars, and as costs rise across the industry.

“We have seen some huge jumps, which are not great for the market,” said one person who monitors pricing. “It risks people losing confidence in Tesla.”

The cuts come after a year where Tesla’s sales rose 40 per cent to 1.3mn globally. In the UK, its Model Y was the biggest-selling electric car, and the third-biggest seller overall.

As leading economies brace for an economic slowdown, the auto industry has been waiting for a drop in orders, something that investors and analysts say is likely to hit Tesla first because of its shorter order book.

A Tesla spokesperson for the UK and Ireland said the price cuts were introduced because of lower costs.

“As we exit what has been a turbulent year of supply chain disruptions, we have observed a normalisation of some of the cost inflation, giving us the confidence to pass these through to our customers,” the spokesperson said.

“As local vehicle production continues to increase and we gain further conflicts of scale globally, we are making Model 3 and Model Y even more accessible across [Europe, the Middle East and Africa].”

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