Jan 13 – Tesla cut prices of its best-selling electric vehicles for the U.S. market, the carmaker’s website showed, after recently cutting prices in China and missing Wall Street estimates for fourth-quarter deliveries.
The price cuts, announced late Thursday in the U.S. for the Model 3 and Model Y, ranged between 6% and 20% from pre-discount prices, according to Reuters calculations.
That’s before factoring in the $7,500 federal tax credit that went into effect for many electric vehicle models starting in early January.
Along with price cuts announced last week in China, the move marks a reversal in Tesla’s biggest markets from a strategy it pursued for most of 2022, when demand was strong and average selling prices for its electric vehicles rose.
The change is Tesla’s first major move since appointing its China and Asia chief, Tom Zhu, to oversee global production and sales after falling short of its 2022 delivery target.
Tesla cut prices in China and other Asian markets last week. Combined with a previous price cut announced in October and recent incentives, China’s price for a Model 3 or Model Y has fallen 13% to 24% since September after the recent move, Reuters calculations showed.
Tesla also cut prices in South Korea, Japan, Australia and Singapore.
Analysts said the price cuts in China would boost demand and intensify pressure on rivals there, including BYD ( 002594.SZ ), to follow suit in what could become a price war in the largest single market for electric vehicles.
Tesla’s main market is the United States and the second largest market is China.
Tesla missed Wall Street estimates for fourth-quarter deliveries.
Last month, Tesla CEO Elon Musk said that “radical changes in interest rates” had changed the outlook across the industry and that Tesla could cut prices to maintain volume growth, leading to lower profits.