Tesla has been making waves in the automotive industry with its latest round of price cuts, auto analysts @Tom Randall tweets are calling the start of a price war between electric vehicles and fuel vehicles. However, Tesla CEO Elon Musk denies that the company is trying to start a war.
Last year, Tesla’s Model Y turned heads as one of the top three SUVs in America, despite its high cost compared to the RAV4 and Honda CR-V. But now, after five rounds of price cuts in 2023, the Model Y’s price has been drastically reduced, making it more accessible to a wider range of consumers.
In fact, Tesla has cut the price of the Model Y by a staggering 24% this year alone, which is unprecedented for a high-volume vehicle in its prime. This drop, combined with the new US EV credit, means that the Model Y now costs $5,300 less than the average price paid for a new car in the US.
While some speculate that this is the beginning of a price war, Musk has stated that the price cuts are simply a way to make Tesla vehicles more affordable for consumers. He notes that the reason for the price cut is not due to a lack of demand, but rather because many people cannot afford the high cost of Tesla vehicles.
It remains to be seen whether prices will rebound after the Model 3 and Model Y refreshes, as they did after the Model S and Model X prices bottomed out in 2020. However, for now, Tesla’s latest price cuts have certainly made their vehicles more attainable for a wider range of consumers.