Tesla is the world’s largest manufacturer of electric cars and has reduced its prices by an unprecedented £8,000 to reverse the slowdown.
Elon Musk is the company’s leader. It made the announcement just weeks after it had reduced the cost of its cars in China. The announcement drew protests from customers who were not able to benefit from the discounts.
Tesla’s cars are now comparable in price to brands such as Skoda and Kia, thanks to UK cuts.
Some buyers were unhappy with the changes which caused immediate losses in vehicle values.
Tesla customers who have received their deliveries posted on social media that they may be considering asking for a refund. Customers still waiting for delivery will benefit from the savings. However, customers who have already received their cars will not be affected.
One member of Tesla Owners Club UK posted on Facebook: “I just picked up the car yesterday. What should I do? Bring the car to Tesla. I lost £5k after I picked up the car.
The long-range Tesla Model 3 model dropped by £6,500 to PlayStation50,990 while the entry-level model fell by a mere £5,500 and £42,990.
The Model Y Performance has seen the largest price drop, dropping by £8,000 to PlayStation59,990. However, the Model Y is now the cheapest, at £7,990.
The price fell suddenly and without warning. The company didn’t say when it would be fixed.
This is a significant reversal in Tesla’s strategy over the past two years, when new orders exceeded supplies. Tesla was able charge more for its latest models.
It has been forced to make more cars than it sells due to increased competition from Chinese rivals and new entrants, as well as rising interest rates and costs.
Thomas Hayes, the Chairman of Great Hill Capital USA, is his name. He said that competition would soon be here and that they will respond by cutting prices.
Musk admitted last year that prices were “embarrassingly high” and could impact demand. Shares fell more than 5% Friday after the company’s worst year. The company is facing stiff competition and slowing delivery.
Toni Sacconaghi, a Bernstein analyst, warned that Tesla will have difficulties securing customers due to the car’s high price.
He said that Tesla would have to lower its growth targets and reduce the capacity of its factories. Or, maintain and perhaps increase global price cuts, which will put pressure on margins.
“We anticipate there to be demand issues until Tesla can offer a lower-priced product in volume. It is possible that this will not occur before 2025.
Musk is trying to win back shareholders support by reducing his stake in Tesla to fund the $44bn acquisition Twitter.
Others shareholders were furious about the move. They said he spends too much on social media platforms, not the car company that made them the richest man in 2022.
Tesla stated that it would be possible to reduce prices if production costs were lower.
Tesla spokesperson stated that the company’s focus on continuous product improvement through original Engineering and Manufacturing Processes has optimized its ability to produce the best product for an industry-leading cost.
“As we close out a year of supply chain disruptions, we have witnessed a normalization in some cost inflation. This gives us confidence to pass them on to our customers.”