Saturday, January 14, 2023

Neil Briscoe

Tesla has dramatically cut its prices in the Irish market, part of a global move to cut the cost of its cars.

The price cuts are enough, Tesla said, to ensure that standard and long-range versions of the hugely popular Model 3 saloon and Model Y SUV “now qualify for the SEAI plug-in grant worth up to an additional €5,000.”

Inclusive of the SEAI grant, prices for a standard Model 3, with a range of 491km, start from €44,990 while the long-range four-wheel drive Model 3, with a range of 602km, now has a starting price of €52,990. The very rapid Model 3 Performance (0-100km/h in as little as 3.3 seconds) starts from €59,990.

For the Model Y, the price of the base version with a single motor and a 455km range now starts at €46,990. The long-range four-wheel drive Model Y, which can cover as much as 533km on a single charge, now costs €53,890 while the high-performance Model Y starts at €63,990.

“In 2022, we continued to advance our mission to accelerate the world’s transition to sustainable energy. We broke records globally with vehicle deliveries growing 40 per cent YoY to 1.31 million and production increasing 47 per cent YoY to 1.37 million” said a Tesla spokesperson.

“In Europe, Model 3 and Model Y became a regular feature of the vehicle sales podium across many markets; not just for BEV’s but across all powertrains.

“Despite significant challenges last year ranging from the semi-conductor shortage, energy crisis, logistics constraints and further Covid-related disruptions, we continued to lay the foundations for our future growth by regionalising production and supply chains. We also began the transition to a more evenly spread distribution strategy to diminish logistical and delivery peaks.

“Our focus on continuous product improvement through original engineering and manufacturing processes have further optimised our ability to make the best product for an industry-leading cost.

“As we exit what has been a turbulent year of supply chain disruptions, we have observed a normalisation of some of the cost inflation, giving us the confidence to pass these through to our customers. As local vehicle production continues to increase and we gain further economies of scale globally, we are making Model 3 and Model Y even more accessible across Europe.”

The move on Irish prices comes in the wake of similar price cuts in the US and China. Indeed, a base Model 3 in the US market now costs less than $40,000 — a significant price point.

Tesla has cut the prices of all of its US models, including the Model S and Model X which currently do not have official Irish pricing because of long-lead delivery times. The price cuts in the US range from $3,000 off the price of a basic Model 3 to as much as $21,000 off the price of a top-spec Model S ‘Plaid.’

In China too, Tesla has cut its prices in the face of increasing competition from Chinese brands such as BYD — which in 2022 became the biggest maker of electric cars in the world, by volume — and Nio, both of whom have launched popular models aimed directly at the Model 3.

Chinese customers have been outraged by the move, saying that it means they over-paid for their cars and some have even mounted protests at Tesla dealerships, organised via the Chinese social media app Weibo.

While the cuts in prices will be good news for any Irish customers wanting to buy a new Tesla in 2023, they are possibly a harbinger of issues to come, both for Tesla and the broader economy. Most car makers have been hiking prices in the past year, as production shortages and increasing costs of raw materials have stymied factories.

Tesla’s move in the other direction comes as the brand annoyed investors by missing its delivery targets for the end of 2022, and the company’s headline-grabbing chief executive, Elon Musk, said that not only had Tesla’s prices become ‘embarrassingly’ high but that he would be prepared to slash costs and sacrifice profit margin to drive demand if the spectre of recession drove the economy down.

In US terms, the price cuts also make several key models eligible for the US government’s new $7,500 personal tax credit for buying an electric vehicle, a factor which must have been a key consideration in reducing the prices, and one from which Irish and European buyers can now also benefit.

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