Up to -17% per night: why Tesla reduces the prices of its electric vehicles in France

On Thursday, the Tesla Model 3 cost 53,490 euros. After 24 hours, it costs 44,990 euros. And even 39,4990 euros with an environmental bonus of 5,000 euros! The Elon Musk-owned automaker moved overnight Thursday through Friday to a rare price drop for its range of electric vehicles in France (up to -17% for the long-range Model Y) as it also did so in the European market. China and USA.

However, in recent months, Tesla has accustomed us to raising prices. A year ago, the cheapest Model 3 already cost 44,990 euros, but its price has increased several times and reached 53,490 euros. “Tesla adapts its prices much faster than other manufacturers, depending on the context: if there is stock, it lowers prices; otherwise, it increases them,” begins Mikael Valentin, author of The Tesla Model. The increase in the prices of these cars has deprived their buyers even of the €5,000 environmental bonus that is reserved for cars under €47,000.

Good sales performance

If a manufacturer today allows himself to reduce prices, it is because the indicators are good, and even very good. In a report released earlier in the year, Tesla announced that it produced 47% more vehicles in 2022 than it did in 2021 (already 87% more than in 2019). “The company has become a traditional manufacturer and is even ahead of BMW and Mercedes in the US,” recalls Mikael Valentin. In France, the Tesla Model 3 was the third best-selling electric car in 2022 behind the Peugeot e-208 and Dacia Spring.

Priding itself on its ability to drive down manufacturing costs, Tesla is primarily driven by the market explosion with double-digit growth, while governments are pushing to move in that direction. In France, according to NGC-Data, the market for electric vehicles grew by 20% in 2022. But with prices “at an obscene level,” by Elon Musk’s own admission, Tesla feared a drop in demand.

Strong Chinese competition

The topic of demand is all the more sensitive for Tesla now that it has to deal with Chinese competitors who are entering Western markets with very good and cheap cars. As such, Byd announced the Atto3 in France at a price of €43,690. The MG4 from MG Motors, considered by many experts to be the best value for money electric car, is on sale there for less than 30,000 euros.

Other Chinese manufacturers such as Great Wall Motors, Nio or Aiways timidly advance their pawns with cannibalistic appetites. “The difference in experience between these cars and Tesla can be offset by more affordable prices,” explains Mikael Valentin, citing Dacia as an example, “a brand for the emerging market that has finally proven itself with us.”

Faced with competition, Tesla is in a hurry to find another model. Shareholders also conveyed a message to Elon Musk, who has been rather focused on the takeover of Twitter in recent months: the manufacturer’s price has fallen by more than 60% in a year. But price cuts shouldn’t be the final solution: In China, new car owners staged a demonstration in front of the brand’s dealerships, feeling logically offended by the decision.