Tesla Inc. (TSLA) is cutting the prices of its cars in the U.S. and Europe to boost sales after shipments in 2022 fell short of expectations.
In the U.S. and parts of Europe, Tesla cut the prices of some of its cars by up to $21,000. The company has also cut prices twice in China in the past few months.
As competition in the electric vehicle (EV) market heats up, Tesla is cutting prices to get a more significant market share. The number of cars Tesla sold worldwide in 2022 went up by 40%, but it was still less than Wall Street, and Tesla predicted.
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Tesla Cuts the prices.
The company that makes electric cars cut the price of its Model Y by $13,000 in the U.S. It also cut the price of its high-end Model S Plaid by up to $21,000. Tesla is also lowering prices in the U.K., Germany, and France, just a few weeks after doing so for the second time in three months for its cars in China.
Last year, there was a lot more competition in the market for electric cars, which made people less interested in Tesla’s cars. In China, which has the biggest market for electric vehicles, local car companies have gained market share by making cheaper alternatives. In December, Tesla sold about 56,000 cars in China. This was more than a fifth less than in December 2021 and 44% less than the month before.
Tesla sold 1.3 million cars in 2022, a 40% increase from the previous year. However, this was less than what Wall Street and the company had expected, which was about 50% more cars sold each year.
In addition to more competition, Tesla has to deal with a slowing economy, inflation, higher interest rates in the U.S., and worries about its supply chain. In 2022, shares of the car company lost about two-thirds of their value because CEO Elon Musk bought Twitter and paid for it in part by selling some of his Tesla shares. After hearing about the latest price cuts on Friday morning, the stock fell another 4%.
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