Tesla slashes Model Y prices in Germany after China price cuts

By Hyunjoo Jin and Christoph Steitz

(Reuters) -Tesla Inc has slashed prices of its Model Y cars in Germany, where it lost the spot as top electric vehicle (EV) seller to Volkswagen in 2023, a week after the carmaker reduced its Model 3 and Model Y prices in China.

Tesla reduced prices for Model Y Long Range and Model Y Performance by 5,000 euros to 49,990 euros ($54,340) and 55,990 euros respectively, representing a discount of 9% and 8.1% compared to the previous prices.

It also cut the price of Model Y rear-wheel drive models by 1,900 euros, or 4.2%, to 42,990 euros, according to data on its website.

While no reason was given for the move, Tesla struggled in Germany in 2023, posting a 9% decline in new registrations to 63,685 vehicles, against an 11.4% increase in EV sales in Europe’s top economy, according to figures from the German federal motor authority KBA.

As a result, Tesla lost its crown as the largest seller of EVs in Germany to Volkswagen, which took a 13.5% share of the market compared to Tesla’s 12.1%.

The latest price cut comes after Tesla announced last week that it would suspend most of its car production at its factory near Berlin from Jan. 29 to Feb. 11. The company blamed a lack of components due to changes in transport routes because of attacks on vessels in the Red Sea.

It also comes as EV makers have entered a discount race in China, the world’s top car market, that Mercedes-Benz CEO Ola Kaellenius called “Darwinistic” last year.

Germany’s EV subsidy programme, originally intended to apply until the end of 2024, ended prematurely last month, a move that was expected to hit German carmakers already struggling to bring down prices to levels offered by Chinese and U.S. competitors.

($1 = 0.9200 euros)

(Reporting by Hyunjoo Jin in San Francisco, Christoph Steitz in Frankfurt and Maria Ponnezhath in Bengaluru; Editing by Ros Russell and Mark Potter)