Weak sales force Tesla to cut prices

Tesla is stepping in because sales numbers fall short of its own projections. More and more electric cars are entering the market, which makes the competition more fierce.

The cheapest version of the Model Y will be 20 percent cheaper in the US market. The basic version then costs $52,990, which drops even further due to a tax credit recently introduced in the US that can be as low as $7,500.

Prices have also been reduced in key European markets, including Germany, the United Kingdom and France. In Germany, the base price of the Model 3 drops about 6,000 euros to 43,990 euros, a decrease of about 12 percent.

Teslas are also getting cheaper in the Netherlands, Belgium, Austria and Switzerland. In Belgium, for example, the price of the cheapest Model 3 will rise from €52,990 to €44,990, says a Tesla spokesperson. With the Model Y, 3,000 euros are subtracted from the price, up to 46,990 euros. The biggest price drop is with the Model Y Long Range: from €65,990 to €53,990. This represents a decrease of 12,000 euros, or 18 percent.

• His Chinese counterpart Musk takes the lead

Worth less than a second hand

Recently, Tesla in China cut its prices for the two models by 10 percent. This is the second decline after the first cut in October last year. In China, Tesla faces increased competition from Chinese manufacturers such as BYD, Xpeng, and Nio.

Price cuts could make Tesla models more affordable to consumers. But it does hurt those who recently bought a Tesla, as the used value is lower now. Earlier this month, hundreds of Chinese Tesla drivers gathered in front of the automaker’s showrooms and distribution centers, expressing their dissatisfaction with the price cuts.

Tesla shares fell about 5 percent on the New York Stock Exchange after the announcement, as lower prices will affect the company’s margins.