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Tesla slashes price of its electric cars by as much as £9,100 with immediate effect

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Tesla has announced it has slashed the worth of its electric cars within the UK with immediate effect, sparking outrage amongst existing customers – especially a few of the 16,000 drivers who took delivery of vehicles at the upper price just last month.

The auto maker confirmed on Friday that it has cut the worth of each the Model 3 and Model Y as of today across Europe and the US. Within the UK, prices have been lowered by as much as £9,100, with the corporate citing ‘normalisation of a few of the cost of inflation’.

Tesla owners who’ve received cars in recent weeks are understandably upset by the move and are calling to be compensated or supplied with free charging. 

One reader told That is Money: ‘After being pushed to take delivery in December I’m furious in regards to the fact the very same model and spec I took delivery of on 23 December is now £7,000 cheaper.

‘This has made me lose all faith in the corporate after having multiple issues with the automobile since delivery also.

‘How will they make it right to me and lots of other customers?’

Excellent news for those who plan to purchase a Tesla; bad news for those who’ve recently taken delivery: The US brand has confirmed it has slashed the worth of its Model 3 and Model Y with immediate effect

One other That is Money reader, David Hutchon, said he had taken delivery of his Model Y 4 weeks ago at a price of £60,000.

‘After all it’s upsetting when an item you will have just bought drops in price but with such an infinite amount involved it’s gutting,’ he explained.

‘If Tesla desires to encourage sales they need to guarantee the present price and refund anyone who bought since their last price rise. 

‘Or no less than provide another compensation, like free fast changing for the following three years. 

‘In the event that they can afford to drop the worth by £10,000 it means they were overpriced originally.’

Are you one in all the purchasers who took delivery of a latest Tesla in December?  Tell us what you’re thinking that…

When you’ve recently taken delivery of a latest Tesla at the upper prices, tell us your thoughts on today’s cuts by emailing rob.hull@thisismoney.co.uk 

Paul Jacobs also got in contact to say he’d ordered his Tesla Model Y Long Range back in June 2022 for delivery on 1 December 2022, paying a complete of £62,290. 

He said this was barely greater than a friend had spent when purchasing the identical automobile months earlier in April 2022.

‘That is so flawed and we should always be compensated not directly its not a number of hundred kilos its a number of thousand kilos,’ he told us.

‘They need to either give a refund or some kind of free charging credit.’

Adrian Kelly emailed That is Money to say he’s one in all the purchasers to take delivery last month and subsequently miss out on the worth cuts.

‘We took delivery of our Model Y performance on 24 December – not our selection as no other date was offered and we didn’t wish to lose automobile, as Tesla are known to allocate it to a different customer.

‘Now I’ve read they’ve dropped the worth by 7k! Gutted.’

Fellow December customer James Shenton told us: ‘I took delivery just before Christmas at the upper price. I’m very disenchanted. I called Tesla today and so they offered no help.

‘I purchased a Model Y Long Range model. They did offer 6,000 mile of supercharging as an incentive on the time.’ 

Similar surprise price reductions announced in China earlier this week ignited anger amongst existing Tesla customers, a whole lot of whom stormed showrooms across the country to vent their frustration at paying 24 per cent more for a similar cars just weeks earlier.

The move is a double-blow for existing owners, with That is Money revealing earlier this week that demand for used Tesla cars has plummeted within the last 4 months.

It has seen the worth of year-old examples dropping by greater than a fifth in comparison with their value in January 2022, which in some cases is a decline of as much as £18,000.

How much does a latest Tesla cost today? 

The Model Y SUV – the best-selling electric automobile in Britain last 12 months and the third most-bought latest automobile across all fuel types – now starts from £44,990, having cost customers from £51,990 up until Thursday evening.

The largest reduction is on the range-topping Model Y Performance, which now costs £59,990, having previously been priced at just over £69,000.

As for the Tesla Model 3 – last 12 months’s second hottest latest battery electric automobile – the entry price now starts at £42,990.

The largest cuts to the Model 3 amount to £8,100 – also for the range-topping Performance variant. 

This might see an increase in demand for Tesla’s smallest automobile, with the worth cut meaning the Model 3 now costs lower than a few of its biggest rivals.

It is going to undercut the Kia EV6 (from £45,245) by £2,255 and ring in at £160 lower than the entry Polestar 2 (from £43,150).

The biggest reduction is on the range-topping Model Y Performance, which now costs £59,990, having previously been priced at just over £69,000, according to Electrifying.com

The largest reduction is on the range-topping Model Y Performance, which now costs £59,990, having previously been priced at just over £69,000, in keeping with Electrifying.com

The Tesla Model 3 now starts at £42,990 following the price cuts, meaning it now costs less than some of its major rivals

The Tesla Model 3 now starts at £42,990 following the worth cuts, meaning it now costs lower than a few of its major rivals

The corporate says the worth cuts are the results of with the ability to pass on lower overheads to buyers.

Nonetheless, industry insiders have raised concerns in regards to the appetite for Teslas in recent months, each on the brand new and used market.

Experts said the brand is ‘doubling down’ on a reduction drive it began in Asia as demand slows against the backdrop of a weakening economy.

The Elon Musk-led company missed its goal in 2022 to grow deliveries by 50 per cent annually and reported that sales of its China-made cars hit a five-month low in December, underlining the hit from rising rates of interest and growing recession fears.

In an announcement issued on Friday morning, Tesla UK said: ‘Our deal with continuous product improvement through original engineering and manufacturing processes have further optimised our ability to make one of the best product for an industry-leading cost. 

‘As we exit what has been a turbulent 12 months of supply chain disruptions, now we have observed a normalisation of a few of the cost inflation, giving us the boldness to pass these through to our customers.’

The statement continued: ‘As local vehicle production continues to extend and we gain further economies of scale globally, we’re making Model 3 and Model Y much more accessible across EMEA [Europe, the Middle East and Africa].’

Protesters gather at a Tesla showroom in Chengdu, Sichuan, China, on 6 January after the brand announced huge price reductions on its new cars

Protesters gather at a Tesla showroom in Chengdu, Sichuan, China, on 6 January after the brand announced huge price reductions on its latest cars 

Crowds also gathered inside the showroom in Chengdu. Demonstrators slammed the sudden discounts of the Tesla Model Y and Model 3, claiming they had missed out on the price cuts

Crowds also gathered contained in the showroom in Chengdu. Demonstrators slammed the sudden discounts of the Tesla Model Y and Model 3, claiming they’d missed out on the worth cuts

Price cuts will likely be celebrated by potential buyers but they’ve enraged existing customers

While the worth cuts are excellent news for buyers trying to order a Tesla from today, it would irk customers who’ve placed orders ahead of Friday 13 January and particularly those that bought the brand’s electric cars in the previous few months.

This includes 16,368 motorists who took delivery from a large shipment of vehicles that arrived in December, of which 10,664 were Model Y SUVs and the remaining 5,704 Model 3 saloons.

It means customers within the UK who received their Teslas last month could have saved within the region of £130million in the event that they had delayed their purchases to January.

Several members of a Facebook group for UK Tesla owners also went online to specific their frustration on the policy.

One wrote: ‘I just picked up the automobile yesterday. What should I do? Go to Tesla and provides back the automobile? I am unable to imagine after a number of hours from picking up the automobile I lost £5k.’

The reductions were described as ‘shocking’ by one person, who wrote that they ‘paid £5,000 more last week’.

One other described a period in late November and early December because the ‘worst three weeks to get a latest Tesla in history’ as a result of the following price cut combined with other issues.

He added: ‘(It) could be nice in the event that they made a gesture to us.’

Autocar says a Tesla spokesperson has told the magazine that all undelivered orders may have their pricing updated routinely to reflect the changes announced on Friday, provided that the unique fee is higher. 

Today’s surprise price cuts follow similar reductions announced in China earlier this week. 

This caused offended protests at Tesla dealers across the country as latest owners demanded rebates, having seen the worth they paid for his or her cars slashed by as much as 24 per cent. 

That is Money has contacted Tesla UK for further comment regarding if it plans to reimburse customers who took delivery of cars in December. We have now yet to receive an official response.

Protesters outside a Tesla showroom in Chengdu, Sichuan, China, on January 6, 2023

Protesters outside a Tesla showroom in Chengdu, Sichuan, China, on January 6, 2023

Customers overseas have also been having their say on the worth reductions.

Greg Woodfill in Seattle, who bought a Model Y in December, had considered waiting until the brand new 12 months to get the US subsidy, but was lured by a reduction on the time of $3,750.

‘It is a punch within the gut, to be honest,’ he told Reuters on Friday, adding that it feels unfair Tesla sought to spice up fourth quarter sales with discounts, only to chop prices a month later.

‘In the event that they knew they’d drop the worth this much, they need to have just done it in December.’

How much has Tesla slashed its automobile prices in numerous markets?

CHINA

Tesla cut prices for all versions of its Model 3 and Model Y cars in China by between 6.0 per cent and 13.5 per cent, in keeping with calculations by Reuters based on the costs shown on its website.

The starting price for Model 3, for example, was cut to 229,900 yuan ($33,427) from 265,900 yuan.

The newest cut in China, together with a price cut in October and incentives prolonged to Chinese buyers over the past three months, mean a 13 per cent to 24 per cent reduction in Tesla’s prices from September in its second-largest market after the USA, in keeping with Reuters calculations.

JAPAN

Tesla cut the costs of Model 3 and Model Y cars by about 10 per cent each within the country, the primary time it had done so since 2021. The worth for the Model 3 rear-wheel drive version is now 5.369 million yen ($40,091), down from 5.964 million yen.

SOUTH KOREA

Tesla’s price cuts within the country differed from model to model, but ranged from about 6 million won to 10 million won ($4,725 to $7,875), an area Tesla sales official said.

The worth of Tesla’s basic Model 3 rear-wheel drive vehicle was listed as 64.34 million won ($50,637) on the corporate’s website on Friday. Its Model Y Long Range sports utility vehicle was 84.999 million won.

UNITED STATES

Tesla’s US price cuts on its global top-sellers the Model 3 sedan and Model Y crossover SUV, were between 6 per cent and 20 per cent, Reuters calculations showed.

The fundamental version of its Model Y now costs $52,990, down from $65,990 previously. The corporate also cut prices for its Model X luxury crossover SUV and Model S sedan in the USA.

GERMANY

Tesla cut prices on the Model 3 and the Model Y by about 1 per cent to almost 17 per cent depending on the configuration.

FRANCE

Customers buying the Model 3 for 44,990 euros ($48,638.69) will now get an extra price reduction through a government subsidy of 5,000 euros. The upper limit for the EV scheme is 47,000 euros. 

Responding to the news, Ginny Buckley from specialist website Electrifying.com said: ‘The news from Tesla today will likely be welcome news to many who wish to buy a latest automobile, particularly as other electric automobile manufacturers are increasing their prices. 

‘Nonetheless, there will likely be plenty of consumers who took delivery of a latest Tesla in December who’re sure to be lower than impressed by the move, which could ultimately undermine confidence in the corporate. 

‘Automotive makers will normally fastidiously manage prices and incentives to avoid crashing used values and upsetting customers.

‘Those trying to buy on finance could also take a success, because the uncertainty makes it difficult for leasing firms to predict how residuals may take a look at the tip of the finance term.’ 

She added: ‘This controversial move from Tesla is sure to send shockwaves through the industry. 

‘With the premium brand now sending signals that it’s becoming far more mainstream; it now means the Model 3 costs lower than rivals from brands equivalent to Polestar and Kia.’

Experts say Tesla's price cuts will not only upset customers but undermine confidence in the company

Experts say Tesla’s price cuts is not going to only upset customers but undermine confidence in the corporate

Fiona Howarth, CEO of Octopus Electric Vehicles, had a way more positive spin on the announcement.

‘Tesla is the Apple of the automobile sector. We’re delighted to see these EV leaders cut prices,’ she explained.

‘By heavily investing of their supply chain, they proceed to make EVs increasingly inexpensive. 

‘It’s over to other suppliers to maintain up – opening up low price, fun electric driving for all.’

Double blow for existing Tesla owners with used values taking a success 

While some will welcome the cheaper price of the posh electric cars, this latest move will likely increase tensions between existing customers and the brand fronted by Elon Musk. 

Used electric automobile values are in freefall

Valuations data seen by That is Money suggests that demand for second-hand electric cars is in decline – and it’s impacting Teslas most.

The worth of a year-old Model 3 is down 21.4% in comparison with what it could have been valued at in January 2022, while the Model S has slipped 20.5%, which translates to a financial loss of just about £18,000.

The Model X crossover can also be down 12.9% in a 12 months.

– Read the total report on used electric automobile values  

Many Tesla drivers were already infuriated over their ownership experience over Christmas, having been forced to spend hours waiting for available charging points while attempting to go to family and friends over the festive period.

The worth reductions will likely be a double-blow to those that took delivery of Teslas in recent months who’re already seeing the worth of their cars go into freefall.

In accordance with valuation data supplied to us by Cap HPI, a one-year-old Model 3 with 10,000 miles on the clock today is price £36,300. 

Some 12 months earlier, a Model 3 fitting the identical description was valued at £46,200. 

That is a fall in value of 21.4 per cent, or £9,400.

Second-hand Model S saloons have seen an analogous level of value decline, falling £17,916 on average within the last 12 months, down from £87,266 in January 2022 to £69,350 today – a drop off of 20.5 per cent.

The Model X can also be down 12.9 per cent, which translated to a financial lack of £12,829.

Electrying’s Ginny Buckley told us: ‘I’m concerned in regards to the knock-on effect this may have on used Teslas, as slashing prices on their latest cars by this much may have a big impact on their resale values.’

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