When Tesla stated on Friday (January 13) that it would lower the price of its top-selling electric vehicle (EV) models, it effectively started price war with its competitors. According to the statement, the reduction will be up to 20% in both Europe and the US. The announcement comes as competition in the expanding EV business intensifies.
The price of Tesla shares dropped as much as 4.5% in early Friday trade. For more than a year, the firm helmed by Elon Musk has seen its stock drop.
‘It’s no secret that demand for Tesla is starting to find some cracks in this worldwide downturn for 2023,’ Wedbush Securities analyst Dan Ives said.
Ives said the price cut was the ‘right move’ and ‘a clear shot across the bow at European automakers and US stalwarts (GM and Ford) that Tesla is not going to play nice in the sandbox.’
A report by Wall Street Journal noted that the discount now makes it possible for buyers of Tesla’s US-built Model Y to take advantage of a tax credit in the US by bringing the price of the car below a $55,000 cap.
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