What to know about Tesla slashing prices

Lower prices, happy customers… mostly.

Singdhi Sokpo

Last week, Tesla slashed prices on its lineup by up to 20%. The changes mean some models now qualify for an additional $7.5k federal EV tax credit through mid-March.

A Tesla spokesperson attributed the drop to “a partial normalization of cost inflation,” and comes as Tesla faces an increasingly competitive market, a challenging demand environment, and a 65% stock dip in 2022.

Not everyone was happy about the cuts — some Tesla customers felt duped after buying one without knowing a discount would go live soon after. But for prospective customers, a discounted Tesla is exciting news.

How long Tesla’s discounts will last, however, remains to be seen. Lower prices will drive demand, though profit margins will take a hit.

  • Bloomberg’s Kevin Tynan calculated that, assuming 1.8m vehicle sales in 2023, lost revenue for the year “would exceed $11B.”

Big picture: EV’s surpassed 10% of vehicles sold globally in 2022 — ~7.8m cars — up 68% from 2021. Expect Tesla to work hard to maintain market share as the world goes electric.

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