Elon Musk Slashes Tesla Prices to Try and Stir Global Demand

Have you gone electric? Elon Musk thinks you should. That’s why he’s slashed Tesla prices in the U.S. and Europe by as much as 20 percent in an effort to get more drivers into electric vehicles (EVs) and out of legacy gas powered alternatives.

The aggressive sales drive follows questions raised on Thursday about the safety risks posed by heavy EVs in any collision with lighter vehicles that pushed the head of the National Transportation Safety Board to issue a general warning to all U.S. road users, as Breitbart News reported.

Reuter’s reports the dramatic Tesla discounting, which prompted a 3.8 percent fall in the company’s shares in Frankfurt on Friday, accompanied Musk enthusing about the prospect of a recession delivering higher interest rates meaning it could lower vehicle pricing to sustain volume growth at the expense of profit.

The shift is the first major move by Tesla since the automaker appointed its lead executive for China and Asia, Tom Zhu, to oversee U.S. output and U.S. and Europe sales, according to the Reuters report.

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Tesla fan forums online were not as approving of the move as Musk.

They complained the price cuts disadvantaged customers who had recently bought their vehicle, leaving them with a lower-valued item on the second-hand car market.

“I’m not very pleased with these huge price sways. Just reducing 10,000 euros like that – definitely makes you feel that you just paid far too much,” one user wrote on a ‘Tesla Drivers and Friends’ forum on Friday.

Tesla confirmed Friday it was able to provide its cars at a more accessible price because cost inflation was normalizing.

“At the end of a turbulent year with interruptions to the supply chain, we have achieved a partial normalization of cost inflation, which gives us the confidence to pass this relief onto our customers,” a spokesperson for Tesla Germany said in a statement seen by Reuters.

In Germany, Tesla cut prices on the Model 3 and the Model Y by between about one percent and 17 percent depending on the configuration.

The Model 3 was the best-selling electric vehicle in Germany last month, followed by the Model Y, beating out Volkswagen’s full-electric ID4.

VW recently raised the price of the ID3 full-electric compact hatchback  putting it on parity with the Model 3.

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Tesla also cut prices in the UK, France, Italy, Austria, and Switzerland.

People who have already placed their order at the old price will be forced to stick with that unless the American firm offers refunds or a price match.

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