Tesla Inc. (TSLA) is slashing prices of its cars in the U.S. and Europe in an effort to bolster sales after 2022 deliveries came up short of forecasts.
- Tesla cut prices on some of its vehicles by up to $21,000 in the U.S. and parts of Europe.
- The company has also recently cut prices twice in China.
- Price reductions come as Tesla fights for market share amid intensifying competition in the EV space.
- Tesla's global deliveries for 2022 grew by 40% but still fell short of Wall Street and internal forecasts.
The electric vehicle maker lowered the price of its Model Y in the U.S. by $13,000 and cut up to $21,000 off the price of its high-end Model S Plaid. Tesla is also dropping prices in the U.K., Germany, and France just weeks after reducing prices on its vehicles in China for the second time in three months.
Demand for Tesla's cars plummeted last year as competition ramped up in the electric vehicle market. In China, the largest EV market, domestic car makers have gained market share by offering lower-priced alternatives. Tesla sold roughly 56,000 cars in China in December, down more than a fifth from December 2021 and 44% from the previous month.
Tesla delivered 1.3 million cars in 2022, a 40% year-over-year increase but short of Wall Street and the company's expectation of about 50% for deliveries each year.
Besides mounting competition, Tesla faces a slowing economy, inflation, higher interest rates in the U.S., and supply chain concerns. Shares of the vehicle manufacturer shed about two-thirds of their value in 2022 amid CEO Elon Musk's highly-publicized purchase of Twitter, financed in part by the sale of some of his Tesla shares. The stock fell another 4% in morning trading Friday following news of the latest price cuts.