Tesla ‘pours more oil’ into the electric car war when it cuts prices for the 6th time in the US market, many competitors have a headache about how to cope

Discount 6 times in the first 3 months of the year

On April 18, Tesla announced discounts on some Model Y and Model 3 electric vehicles in the US market on its website. This is the sixth time the company has cut prices in the US this year, amid concerns about the impact on profit margins.

Tesla reduced the price of the Model Y by $3,000 each, and the price of the Model 3 by $2,000, to $39,990.

As such, Tesla has slashed the Model 3’s US price by 11% to date and 20% of the Model Y. The moves come as the US prepares to introduce stricter standards and that will limit credits. electric vehicle tax.

The company, run by CEO Elon Musk, also recently slashed prices in Europe, Israel and Singapore as well as in Japan, Australia and South Korea, a series of discounts the company started in China last month. 1 to drive demand.

However, Tesla, earlier this month, reported a 4% increase in first-quarter deliveries, much lower than the 17.8% consecutive increase in the fourth quarter of last year. The sharp price drop also raised concerns about the Austin, Texas-based company’s industry-leading profit margins.

Tesla price cut is a ‘warning’ for the auto industry

Continuously adjusting the prices of cars in a short period of time, Tesla is causing many competitors headaches about its pricing strategy. Many industry experts have also called Tesla’s consecutive price reductions as the move that sparked a price war in electric vehicles. To insiders like Renault CEO, Fabrice Cambolive, agrees with the above statement.

Since the beginning of this year, Tesla has made 6 price adjustments, including 2 sharp adjustments, especially there are models at Tesla that have reduced prices by tens of thousands of dollars compared to 2022. Interview with Reuters , CEO Renault said: “Tesla’s continuous price reduction is clearly a challenge, it is a warning that Tesla is sending to other manufacturers.”

In response to the price policy from Tesla, Renault reduced the price of the electric car Megane, causing car sales to increase in March. However, when compared to the level of discount, the electric car from Renault still cannot compete with Tesla.

Previously, a Volkswagen representative said that he was not excited to participate in the price race with Tesla but would focus on product quality. Renault will also adopt a similar strategy, CEO Fabrice Cambolive added: ” Renault will evaluate each country, each market, and then determine the level of competition we need to meet in order to survive .”

On the Tesla side, on the one hand, billionaire Elon Musk believes that there is no price war going on, on the other hand, price adjustments are still being made and Tesla car sales continue to increase thanks to this new policy. Soon, Tesla will release its first-quarter earnings report, which will be the clearest demonstration of the effectiveness of the price adjustments that Tesla has made over the past time.

Reference: Reuters