Tesla’s stock price took a hit in 2022 as it lost more than $700 in value. The company tried to recover some of these losses by implementing two model discounts last year. The most recent one was only recently put into effect. Now, the company is offering even more discounts.
In December, Tesla reduced the prices of its Model 3 and Y by $7500. The company has now followed up with similar price cuts on both models. For instance, the base Model Y was reduced by $6,700, which brings its starting price down to $52,990. These new prices are applicable to all new orders.
The base model of Tesla’s flagship Model S model dropped from $139,990 to $114,990. On the other hand, the base version of the company’s original sedan went from $94,990 to $94,990. Model X prices were also reduced, with the model’s price going down by $19,000. Despite this, the two variants of the Model X remain well over $100,000.
The company also made its more affordable models more accessible by reducing the prices of the Model 3 sedan by 6%. The Model 3 Performance, which was previously priced at over $62,000, saw its price drop by $9000. In addition, the company made significant discounts on its high-end models, such as the Model S and the Model X crossover.
The company’s chances of achieving a low price remain unclear due to the various factors that affect its pricing. For instance, the modifications to the Model Y could make it an EV SUV, which would subject it to the $80,000 tax cap for this type of vehicle. Also, the Model Y’s battery could not meet the North American sourcing requirements.
The price cut for the Model Y is a sign that Tesla is struggling to maintain its profitability. The base model of the midsize crossover is now below the new tax credit, which provides an additional $7500 in incentives. This could reduce the true market price of the Model Y to around $45,490.
The company’s aggressive pricing is also a sign that it is struggling to maintain its position as a leader in the electric vehicle industry. Due to the increasing number of new models from both legacy and startup manufacturers, Tesla is now facing an influx of genuinely good competitors.
The discounts show Tesla’s acknowledgment of the competition as it tries to maintain its position as the world’s No. 1 EV seller. It’s not clear how much market share is up for grabs, as Tesla has maintained its dominance. However, the company’s future prospects are not good.
