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Electric vehicle maker Tesla is cutting prices again in the US and across Europe, according to listings on the company’s website Thursday night in the US
Tesla didn’t respond to a request for comment on why it lowered prices this week.
Nonetheless, the US move could help Tesla qualify for more federal electric vehicle tax credits and increase sales volumes domestically and internationally as competition and rates of interest increase.
In Europe, Tesla lowered the prices of its Model 3 and Model Y vehicles in Austria, France, Germany, Netherlands, Norway, Switzerland and the UK
Tesla Model Y (left) and Model 3 electric cars at the company’s official launch in Bangkok on December 7, 2022. The Model 3 is the company’s entry-level sedan. The Model Y is assessed by some as an SUV and by others as a crossover.
Lilian Suwanrumpha | AFP | Getty’s paintings
reported Reuters that in Germany, Tesla reduced the prices of the Model 3 and Model Y from 1% to about 17%, depending on the configuration. Tesla’s Model 3 was the best-selling electric vehicle in Germany in December 2022, followed by the Model Y. The corporate beat Volkswagen and his popular ID.4 electric vehicle in Germany.
Tesla’s discounted Model 3 is comparable to Volkswagen’s entry-level electric automotive, the ID.3.
According to independent electric vehicle industry researcher TroyTeslike, the price of the recent Tesla Model 3 in the US fell between 6% and 14%, depending on the configuration, and the cost of the Model Y fell by about 19%, also depending on the configuration.
The Model 3 is Tesla’s entry-level sedan. The Model Y is assessed as an SUV by some and a crossover by others. The corporate also lowered the prices of its higher-priced Model S sedan and Model X falcon-wing SUV in the US
Typically, electric vehicles qualify for tax credits in the United States depending on what form or category they fall into, their performance and range (meaning the variety of miles they’ll go on a completely charged battery), and the suggested by the retail price manufacturer.
The U.S. government has delayed enacting recent sourcing rules for battery raw materials and components to qualify automakers for a $7,500 green vehicle tax credit until at the least the end of March 2023.
This implies Tesla — and other electric vehicle makers — can buy parts and key minerals from suppliers around the world for now, and still qualify for some EV subsidies. Applicants for federal grants must complete final assembly of their electric vehicles in North America under current interim regulations.
Tesla’s latest round of rebates could see the company reap the advantages of electrical vehicle tax credits in each the short and long run. But it surely also risks upsetting customers who’ve just agreed to receive recent electric cars from Tesla before the end of 2022 at higher prices.
Tesla earlier this month indignant customers in China, cutting prices on its Model 3 and Model Y cars after many agreed to deliver at higher prices before December 31. Some customers staged protests and demanded discounts, but up to now Tesla has not relented, according to a Reuters report.
In late December, Tesla slashed the prices of its Model 3 and Model Y cars by about $7,500 to encourage customers to pick up deliveries before the end of the fourth quarter. Tesla also offered some US customers 10,000 miles of free charging (at Tesla Supercharger stations) in the event that they agreed to pick up a delivery before the end of the yr.
Despite the reductions, in the fourth quarter of 2022, Tesla reported deliveries of 405,278 vehicles and production of 439,701 vehicles. The corporate told shareholders to expect a 50% annual increase in vehicle deliveries over a multi-year horizon, but failed to meet that annual goal and analyst expectations in the fourth quarter.
Tesla now operates its first US auto plant in Fremont, California, a more moderen one in Austin, Texas, its first overseas plant in Shanghai, and a more moderen one in Gruenheide, Germany.
The corporate’s production capability needs to be much higher in 2023 than in previous years with these factories, but bearish analysts have raised concerns a few possible “demand cliff.”
Tesla now faces more competition, higher rates of interest and slower consumer spending than in recent years, Bernstein analysts wrote in a January 12 memo.
They said: “We imagine many investors underestimate the scale of the demand challenges facing Tesla.” Nonetheless, the company had a “poor” rating and a $150 price goal for Tesla shares after the company’s share price declined in recent months.
CEO Elon Musk sold his billion-dollar Tesla stock last yr, in part to fund a leveraged buyout of Twitter for about $44 billion. Since taking on Twitter and becoming CEO in late October, Musk has been splitting time and sharing some resources between the social media business and his electric automotive company.
Tesla plans to announce its fourth-quarter 2022 results on January 25, 2023, which is when it should share its recent forecasts for the coming yr.