SAN FRANCISCO – Tesla is offering discounts of more than $1,300 on some Model 3 cars in its U.S. inventory, after even steeper price cuts in Europe, a Reuters review of its website shows, even as the electric carmaker has the most new orders. raised its price in the United States. cars this month.
Facing economic headwinds and intensifying competition, Tesla has aggressively cut vehicle prices in several regions this year and is resorting to traditional automaker tactics of offering incentives to clear inventory, analysts said.
Chief Executive Officer Elon Musk told shareholders on Tuesday that Tesla is experimenting with advertising for the first time, which analysts say could boost demand. Musk warned that Tesla is not immune to the global economy, predicting that it will be difficult over the next 12 months.
Tesla has raised the price of some new models twice in the US this month, although prices remain well below where they were before this year’s price cuts began.
According to the website, Tesla is now offering discounts of more than $1,300 on select Model 3 cars, up from $250 off some Model Y and Model 3 vehicles earlier this month. As of Friday, the $250 discount was no longer offered on the Model Y.
US pricing for the Model 3 starts at $40,240, and the Model Y starts at $47,490.
“Tesla is starting to rely on incentives in the same way that traditional automakers do when their dealer inventory spends too much time on the lot,” said Edmunds.com Director of Insight Ivan Drury, adding that the incentives “signal that the Tesla has started to oversupply the market a bit.”
Tesla plans to launch a facelifted version of its Model 3 sedan this year to refresh its aging lineup. Jim Farley, CEO of Ford Motor Co., said last month that the price cuts aimed at boosting sales volume reflect pressure on Tesla from competition and an aging product lineup.
HEAVY DISCOUNTS IN EUROPE
Tesla’s US rebates this month follow major European rebates as production at factories in China and Berlin exceeded demand.
Tesla is offering discounts of up to €3,490 ($3,841.79) on a China-built Model 3 and €3,660 ($4,028.93) on a Berlin-built Model Y, according to Tesla Info’s global inventory list. Other markets such as France, Germany, the UK and Italy offer similar discounts.
Tesla researcher Troy Teslike tweeted Friday that Tesla solved its inventory problem in China by exporting from that market.
“The problem is that exported cars in Europe end up in inventory near all-time highs. Now Europe has an inventory problem, but China doesn’t,” he said.
Tesla did not respond to Reuters’ request for comment, but Musk said at the shareholder meeting that the company’s approach was clear.
“We’ll see how much demand there is and then adjust the price to match that demand,” he said.
In the first quarter, Tesla had 15 days of global inventory, lower than industry norms but the highest in nearly three years. The industry average for inventory in the US only is 35 days. Tesla also produced more cars than it sold, which analysts said put pressure on the dealer-starved company to absorb excess inventory.
When demand slows, inventory “starts to run out of cash very quickly,” said Tyson Jominy, head of consulting firm JD Power.