Tesla Cuts Electric Vehicle Prices by 20% in the US and Europe

[Asia Economy Reporter Kwon Haeyoung] As Tesla recently faced sluggish sales leading to an excess inventory of electric vehicles, it has launched aggressive discount sales for major models in both the United States and Europe.

According to major foreign media on the 13th (local time), Tesla announced on its website the previous evening that it would discount the US prices of the sedan Model 3 and Model S, as well as the sport utility vehicle (SUV) Model Y and Model X by 6-20% compared to before. This is the price before applying the maximum $7,500 (about 10 million KRW) tax credit benefit granted to electric vehicles under the US Inflation Reduction Act (IRA) that took effect earlier this year.

Tesla also reduced the prices of Model 3 and Model Y in Germany by 1-17% depending on detailed option configurations. Prices in Austria, Switzerland, and France were also lowered.

As a result, when Americans purchase a Long Range Model Y vehicle, including the tax credit benefit, they can buy a new car at about 31% cheaper than before.

In particular, with this price reduction measure, several Tesla models, including the 5-seater Model Y, have newly become eligible for the tax credit.

Last week, Tesla also implemented price cuts of around 10% on major models in Asian markets including China, Korea, Japan, and Australia.

This is analyzed as a signal that Tesla has shifted its sales strategy. Until now, demand for electric vehicles was high and prices were rising, but in the US, new car inventory has increased and used car prices have fallen, increasing pressure to adjust prices. Additionally, confusion following CEO Elon Musk's acquisition of Twitter and a series of erratic behaviors, known as 'owner risk,' have weakened Tesla's fandom in the US.

According to Forbes, a US economic magazine, based on a recent survey by market research firm Morning Consult, the percentage of US adult males with a favorable view of Tesla dropped to 13.4%, half of what it was a year ago (28.4%).