Tesla Massively Reduces Prices. Here Are the New Prices and Why They Did It

Tesla makes their vehicles more affordable in regions around the world

Not a Tesla App

Tesla dropped prices on all models in several countries, which should not be surprising. It's unlikely it has anything to do with the company's plummeting value on the stock market, a perceived lower demand, or an effort to qualify for tax credits. Tesla's entire price drop game plan was forecast just a few days ago by a Tesla executive in China.

Tesla does not have a communications department. All the company information comes from its website, social media accounts or Elon Musk's Twitter account. That's why it was worth finding a translation of a rare interview a Tesla vice president gave to the media in China on January 9, 2023.

When Tesla Executives Speak, You Should Listen

Tao Lin spoke to reporters just days after Tesla dropped the prices in China. Her answers provided reasons behind the lower prices, not only in China but worldwide. "Some media said that we lowered the price because we couldn't sell anymore. I think it's really nonsense," Lin said. "I personally think that the price adjustment reflects our better planning for the supply chain in a sense, and what level the vehicle cost will be, and then we make such adjustments according to this estimate."

Lin then explained, "The price adjustment of a product is actually a forecast of the company's cost changes in the next period of time. The biggest difference between 2023 and last year is that the epidemic has basically passed. We believe that the supply chain has returned to normal to a large extent, and there will be no such unpredictable shortages of materials as in previous years, which brought cost uncertainty."

Tesla Supply Chain Certainty Indicated in Q3

During the third quarter earnings call, Musk spoke about supply chain issues that had hampered production during the pandemic. But he also discussed how the company had advanced in other areas and was optimistic about future production. "What we are seeing is practical improvements as we redesign the whole supply chain and all of the elements that go into a battery cell. We're figuring out dramatic efficiencies."

Zachary Kirkhorn, Tesla's Chief Financial Officer, answered a question about the Inflation Reduction Act during that same earnings call. There were not many details available at that time. Still, he stated, "it's difficult to fully determine the eligibility criteria, but we believe Tesla is very well-positioned to capture a significant share of that for solar storage and also electric vehicles."

Tesla's Transparency is the Problem

Some customers in China who bought a Tesla just before the price cut were furious. That's likely to be the case in other countries as well. However, consumers need to remember that Tesla is a direct sales model. How quickly everyone forgets auto dealers have been changing prices for decades.

Lin gave this example, "for a traditional car, everyone buys it at a different price at a dealer, so you don't really know whether the price you bought is the lowest or not, and you don't know what price other people are buying. Is it fair to consumers?"

Tesla has not only changed the automotive industry by making electric vehicles a viable product, but it also changed how people buy cars. "We adopted some relatively new concepts, such as the direct sales model, such as price adjustment strategies, and we hope to gradually make everyone feel that these concepts are feasible. Under the direct sales model, the prices are completely open and transparent, without discounts or price increases, and everyone is the same at the same time."

Price Reductions in the U.S.

We suspected these price cuts were coming as the EV tax credit in the US listed all Model 3s and Model Ys as qualifying for the tax credit. All variations of the Model Y now qualify for the $7,500 tax credit in the US.

The price cuts also affect many countries around the world such as Spain, France and Portugal. Although the reduced pricing of the Model S and Model X appears to be limited.

Below is a list of the new and previous prices of all Teslas models in the US and the percentage changed.

Tesla Starts Offering Enhanced Autopilot Subscription in China, FSD Coming Soon?

Tesla has started offering Enhanced Autopilot (EAP) in China via a subscription starting at 699 yuan per month — equivalent to about $98.5 USD. It’s the first time Tesla owners in the country will have access to features such as auto lane change, Autopark, Smart Summon, and others.

It’s not clear whether Tesla will begin to offer EAP as a subscription in other regions as well.

The move is seen as the first step towards the expansion of Tesla’s full self driving to China as other markets outside North America wait for the arrival of the FSD software. Yesterday, Tesla chief executive Elon Musk said the version 12 is “ready for supervised FSD in LHD countries” while RHD countries such as Australia, UK or Japan “will take a bit longer”.

FSD in China

China giant Baidu announced last Monday that it will provide all Tesla vehicles in China its latest version of Baidu Maps starting in May.

This week, Tesla celebrated its 10th anniversary in the Chinese Market where it has a total of 1.7 million owners — Tesla’s second largest market. Elon Musk recently tweeted that Tesla may soon offer full self-driving in China by saying “It may be possible very soon”.

FSD in Europe

On Friday, the Senior Advisor of the Swedish Transport Transportation, Rikard Fredriksson, shared on LinkedIn that he had been demoed the FSD technology in Germany with a Tesla employee. The moment marks the first official use of the assisted driving software in Europe. 

Impressive smooth and natural driving

LinkedIn Post by Rikard Fredriksson after the FSD Demo in Germany

In the recent earnings call, Elon Musk said Tesla has over 300 million miles that has been driven with FSD v12 since it was launched just last month. He added that it's becoming “very clear that the vision-based approach with end-to-end neural networks is the right solution for scalable autonomy”.

Tesla said it has been investing in the hardware and software ecosystems necessary to achieve vehicle autonomy and a ride-hailing service. The company is confident that it can establish a scalable and profitable autonomous driving business by employing a vision-only architecture.

Tesla has recently reduced the pricing of its “Full Self-Driving” software in the US, from $12,000 to $8,000, and in Canada from CA$16,000 to $11,000. This price reduction follows a 50% cut in the subscription fee announced earlier this month.

Follow

Follow

Follow

Rivian Follows Suit, Will Open Up Charging Network to Teslas

Electric vehicle maker Rivian Automotive has announced that it will open up its Rivian Adventure Network (RAN) chargers to Teslas and other EVs later this year.

The Rivian Adventure Network is a comprehensive network of fast-charging sites very similar to Tesla’s own Superchargers. According to Rivian, the Rivian Adventure Network is powered by 100% renewable energy.

New Rivian Chargers

In a post on X, Rivian added that it would introduce new chargers with a tap-to-pay experience to support “a wide range of EVs across a variety of battery voltages.”

Expanding RAN chargers and introducing new tap-to-pay chargers is a clear indication that Rivian is trying to increase customer convenience while ratcheting up its brand value.

All Rivian vehicles and most other EVs still use the CCS connector until they transition to NACS in the next few years. These new chargers will likely include a combination of NACS and CCS connectors to support Rivian’s current and future vehicles that will come equipped with an NACS port.

Charging a Tesla at a Rivian Charge

With over 50,000 Supercharger stalls, Tesla operates the biggest fast-charging network in the world. And 25,000 of these are located in the United States alone. The simplicity of charging at a Supercharger is part of the appeal. Tesla takes care of everything from initiating charging to billing. It ends up being no different than charging at home.

Tesla’s Supercharger network has a stellar reputation, mostly due to its high charging speed and reliability, which Tesla closely monitors in real-time. Major electric vehicle makers will start switching to NACS in the next few years and considering that the Supercharger network is highly trusted, one can see more non-Tesla EVs lining up at Superchargers soon. Giving Tesla owners more choice of where to charge may be crucial to combat congestion.

Rivian currently has over 400 charging stalls across 22 states but plans to expand to more than 600 chargers.

Making Rivian Chargers Just as Simple

While Rivian plans to add a tap-to-pay terminal to its new chargers, it’ll be difficult to beat the convenience of Superchargers for Tesla owners. After Rivian opens up its chargers to other EVs, Tesla owners would need to buy and use CCS to NACS adapters to charge at these networks, although not every Tesla supports the adapter. You can check if your vehicle supports the Tesla adapter.

To simplify the process for Tesla owners, Tesla would also need to interface with Rivian’s chargers to make billing as seamless as it is on its own Supercharger network.

Rivians Charging at Superchargers

Rivian has already begun shipping its customers NACS-to-CCS adapters to charge their vehicles at Tesla Supercharger.

Rivian officially got access to Tesla’s Supercharger network in March 2024. For now, only two companies–Ford and Rivian–have received access to charge at more than 15,000 Tesla Supercharger stalls. More companies like GM, Polestar, and Volvo will get access the following spring.

But Rivian is not stopping at NACS-to-CCS connectors. The Tesla rival plans to switch completely to the NACS port in 2025, at which point they’ll provide their owners a CCS to NACS adapter.

Follow

Follow

Follow