Tesla's market valuation dropped somewhat in 2022 but is now beginning to slowly stabilise. In an effort to recover some of these losses, Tesla has implemented two separate model price discounts, with the most recent put in place only a few weeks ago. Now, Tesla has gone one step further by offering a third set of discounts at a significant discount rate.
After temporarily dropping its Model 3 and Model Y prices by $7,500 (dollar amounts are in $U.S.) in December, with Model 3 of $40,690 and Model Y of $59,690, Tesla has now dropped these prices on both models at varying percentage rates.
For the base Model Y crossover, the price was reduced by $6700, setting the starting price at $52,990. That's an 11% reduction from just a few weeks ago. These new price reductions are applicable to new orders only.
These price reductions for the Model Y, the most popular model in the US, is a signal that Tesla needs cash. With the base price now below the new EV tax credit capped at $55,000 for U.S. EV customers, Tesla's midsize crossover could now be eligible for an additional $7,500 in tax incentives. That could drop the true retail rate for a base Model Y closer to $45,490.
The likelihood of such a low price remains up in the air, as modifications to the five-seat, long-range Model Y could change its classification to an SUV, subjecting it to the Inflation Reduction Act's $80,000 price cap for EV SUV tax credits.
Just as well, the model's battery could fall short of the North-American sourcing stipulations found in the IRA and would only receive a $3,750 tax credit. All in all a challenging time for both Tesla and it’s customers.
Note - those government incentive schemes mentioned above relate to the U.S. regulations and not to New Zealand.
It was recently reported that Tesla has overtaken the German carmaker BMW to become the top luxury car brand in the U.S. for 2022, becoming the first American vehicle manufacturer in 25 years to hold that title.
Tesla sold over 491,000 cars to the U.S. car buyers in 2022 compared to BMW who sold close to 332,400 cars during the same period, according to estimates by a Research & Data Centre. The American EV maker’s sales last year were more than 56% of what it could sell in 2021, according to the same report.
In 2021, BMW had beaten Tesla by about 23,000 units, but the German car brand’s sales were down by 1.3% last year.
Other luxury car brands in the 2022 listed in the report included Mercedes-Benz which sold about 286,760 cars, followed by Lexus (258,704), Audi (186,875), Cadillac (134,726), Acura (102,306) and Volvo (102,038).
Tesla set several company records in 2022, selling over 1.31 million vehicles around the world and increasing production by 47% compared to last year. Tesla had predicted to increase sales by 50%, however, 47% is not that far away. These numbers represent a record growth for the company in sales, a roughly 40% increase in deliveries in the final quarter year on year.
Once again, 2023 could provide some new challenges, not only for Tesla but all the other carmakers.