San Francisco — Tesla is offering more than $1,300 discount on some 3 . sample Even as the electric carmaker raised prices in the US for most of the new vehicles ordered this month, according to a Reuters review on its website.
Faced with economic headwinds and increasing competition, Tesla has this year slashed car prices in some areas, using the tactics of automakers, analysts say. Traditional car manufacturers are offering incentives to free up inventory.
On Tuesday, CEO Elon Musk tell the shareholders Tesla will try advertising for the first time, a move that analysts say could boost demand. Musk warned Tesla is not immune to the global economy, predicting it will be tough over the next 12 months.
Tesla has slightly raised the prices of some new models twice this month in the US, though prices are still much lower than they were before the sale began this year.
Tesla is now offering more than $1,300 in discounts on select Model 3 vehicles, up from a $250 discount earlier this month on select models. Model Y and Model 3 vehicles, according to the website. As of Friday, the $250 discount is no longer offered on the Model Y.
US pricing for the Model 3 starts at $40,240 and the Model Y is $47,490.
“Tesla is starting to rely on incentives in the same way as traditional automakers when they seller inventory starts to take up too much time to ship,” said Edmunds.com director. Clear look Ivan Drury, added the incentives “signal that Tesla has begun to overprovision the market a bit.”
Tesla plans to launch an improved version of the Model 3 this year to refresh its aging lineup. The price cuts to boost sales reflect the pressure Tesla faces from competition and an aging product line, rival Ford Motor Co CEO Jim Farley said last month.
HUGE DISCOUNT IN EUROPE
Tesla’s U.S. price cut follows deep cuts in Europe this month as production from factories in China and Berlin far exceeds demand.
Tesla offers discounts of up to 3,490 euros ($3,841.79) for the China-made Model 3 and 3,660 euros ($4,028.93) for the Berlin-made Model Y, according to Tesla Info’s global inventory list. Other markets such as France, Germany, UK and Italy offer similar discounts.
Tesla researcher Troy Teslike tweeted on Friday that Tesla solved its inventory problem in China by exporting from that market.
“The problem is that export cars are stocked in Europe, which is close to an all-time high. Now Europe is having an inventory problem but not China,” he said.
Tesla did not respond to Reuters’ request for comment, but Musk at the shareholder meeting said the company’s approach is simple.
“We see what the demand is and then we adjust the price to meet the demand,” he said.
In the first quarter, Tesla had a 15-day global inventory, less than industry standards but the highest in nearly three years. The industry average for US-only inventory is 35 days. Tesla also makes more cars than it sells, which analysts say has pressured the dealership-shortened company to absorb excess inventory.
As demand slows, inventory “starts to run out of cash very quickly,” said Tyson Jominy, chief executive officer of consulting firm JD Power.
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