Faced with worrisome demand, Tesla now has significantly cut the price of the Model Y across Europe, echoing a move it made in China a week earlier.
Data from Tesla's official website shows that it has instituted price cuts in markets such as Germany and France.
In Germany, Tesla reduced the price of its Model Y Long Range and Model Y Performance by 5,000 euros each, to €49,990 and €55,990 respectively. The amount would mark discounts of 9% and 8.1% from the previous prices of these two models. In addition, The price of the Model Y Rear-Wheel Drive was also lowered by 4.2%.
At the same time, Tesla lowered the price of the Model Y by 6.7% in France while offering a discount of as much as 10.8% in Denmark. In the Netherlands, Tesla cut the Model Y price by 7.7%, and in Norway, prices were dropped by between 5.6% and 7.1%.
Notably, Tesla also is offering 0% financing, another costly incentive, in these countries.
Slowed Electric Vehicle Demand
Though Tesla did not provide a reason for the price cuts, overall demand for electric vehicles has been slowing due to decreased governmental subsidies and the high borrowing costs that are causing potential buyers to reconsider large purchases.
According to data from the German Federal Motor Transport Authority (KBA), a total of 524,219 new electric cars hit the road in Germany in 2023, an increase of 11.4% compared to 2022, showing a slowdown in growth rate. Tesla saw new vehicle registrations in Germany drop by 9% to 63,685 units with its market share falling to 12.1%.
As a result, Tesla lost its crown as the top EV seller in Germany to Volkswagen, which captured a 13.5% market share.
The past year has seen intensified competition in the EV market, with Tesla facing challenges from numerous other automobile manufacturers. Chinese automaker BYD took over as the world's largest electric vehicle manufacturer in 2023, replacing Tesla.
Tesla's Poor Start in 2024
These price cuts, along with UBS Group and Wells Fargo cutting their target prices, dragged Tesla's stock down about 2% on Wednesday. This furthers the poor start for the stock in 2024 – Tesla's stock price is already down more than 13% since the beginning of the year.
Previously, Wells Fargo and UBS each reduced their target price for Tesla's stock by over 8% and nearly 11% respectively.