Tesla made the Model Y more affordable across a number of European countries this week, following an earlier price reduction applied in China.
The changes are quite noticeable, of at least several percent. In Germany—Europe's largest car market—the Model Y is up to about 9% less expensive.
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Telsa Model Y is Europe's best-selling EV.
In 2023, the Tesla Model Y was Europe's best selling all-electric car, although it seems that the prices have to be adjusted to the current market situation. The model is produced locally in Germany.
According to Reuters, the new prices of the Model Y in Germany are as follows:
- Long Range RWD: €42,990 - down €1,900 or 4.2%
- Long Range AWD: €49,990 ($54,340) - down €5,000 or 9%
- Performance: €55,990 - down €5,000 or 8.1%
Tesla does not explain what caused the reduction, but we know that the company's overall new registrations (so also sales) in Germany decreased in 2023 by 9% year-over-year. The Model Y is Tesla's main product with 45,818 registrations (up 29%), out of 63,685 in total (down 9%).
The news about the price changes comes just a few days after we heard that the Tesla Giga Berlin-Brandenburg plant in Grünheide near Berlin, Germany will suspend most of its Model Y production for about two weeks due to supply chain issues related to the conflicts in the Red Sea area.
The price reductions in Germany (and many other European countries), also led to the Model Y being priced similarly to the latest Model 3 (also known as Highland), which is imported from China. The Model 3 RWD costs the same as the Model Y RWD, while the Model 3 Long Range AWD is a bit more expensive than the Model Y Long Range AWD.
The Tesla Model Y's price reduction in other European countries seems to vary between several percent to over 10%.
Supply and Demand
According to Troy Teslike's Tesla-focused data research, Tesla Model Y deliveries in Europe reached their peak in Q1 2023 and have been falling since then every quarter. The report indicates that the year ended with some 32,000 unsold Model Y in Europe sitting in its inventory (including the 10-day production pause at the Giga Berlin in December).
If these numbers are correct, then the price reduction and an additional production pause in January-February seem reasonable—more or less directly related to the supply and demand.
For reference, in the U.S. and China, the quarterly deliveries of the Model Y were still growing from quarter to quarter.
It's worth noting that earlier this month, Tesla reduced prices of the Model 3 and Model Y in China by up to several percent as well. This opens a question of whether we will see a similar move at some point this quarter also in the U.S.
Tesla Model 3/Model Y prices in China (compared to November 2023):
- Model 3 RWD (LFP): $34,523 (245,900 CNY) - down 15,500 CNY or 5.9%
- Model 3 Performance: $40,138 (285,900 CNY) - down 11,500 CNY or 3.9%
- Model Y RWD (LFP): $36,348 (258,900 CNY) - down 7,500 CNY or 2.8%
- Model Y Long Range AWD: $42,104 (299,900 CNY) - down 2,500 CNY or 0.8%
- Model Y Performance: $51,089 (363,900 CNY) - no change
China appears to be the largest single market for the Tesla Model Y in recent quarters, even ahead of the U.S.
