February 7, 2023

Tesla is cutting prices sharply as it moves to increase demand

Tesla has slashed the prices of two popular electric cars in the US and Europe by as much as 20 percent in a bid to stimulate sluggish demand.

The move comes as Tesla faces increasingly stiff competition in the global electric vehicle market.

Tesla recently cut prices in China and reported a Total global sales for 2022 This was lower than analysts’ expectations. After announcing the latest price cuts, Tesla stock fell about 5 percent in early trading on Friday. The share price is down about 70 percent since November 2021.

The latest price cut for Tesla cars appeared on the company’s website late Thursday. The automaker now shows the Model 3 high-performance compact selling in the U.S. for less than $54,000, down from $63,000, a 14 percent drop.

The most affordable version of the Model 3 now sells for under $44,000, a markdown of about $4,000.

For some lower-priced models, the reductions put them in a qualifying range for the $7,500 federal tax credits that were made available as of January 1 under the Inflation Reduction Act. The credit is available for electric vehicles under $55,000.

Tesla sold 1.3 million cars in 2022, up 40 percent from the previous year, but below the 50 percent annual growth target the automaker has set for itself. In recent months, rising borrowing rates have made its electric cars more expensive for the people who borrow.

Tesla’s fourth-quarter production of 440,000 vehicles was 34,000 more than the company’s, indicating that the recession has outgrown supply chain problems and production issues.