Price reductions of up to 20% in Europe and the US on the Model 3 and Model Y, its most popular cars. This is the strategic reversal that Tesla decided to give a boost to its sales threatened by the deterioration of the economy and high interest rates, which makes buying a car more expensive and the access of multiple competitors to the electric car market. The group has already cut its prices twice in China in recent months and offered unusual promotions in North America at the end of 2022 for customers who agreed to own a new car before the end of December. It was not enough to achieve his goals. In 2022, the group delivered 1.31 million electric vehicles, which is a record high and a jump of 40% in one year. But Elon Musk’s company has set itself the goal of increasing deliveries over the long haul by an average of 50% annually.
“This should really drive volumes in 2023 (from Tesla),” said Gary Black, a Tesla investor who remained optimistic about the company and its prospects despite the recent sharp drop in the share price on Friday. (-5%). “It’s the right decision.”
In France, the Model 3 becomes eligible for the Eco Bonus
There is already enough to increase sales. In France, the Model 3 dropped from €8,500 to €44,990, making the car eligible for a €5,000 environmental bonus. In the US, discounts range from 6% to 20% on the Model 3 and Model Y, according to calculations by Reuters of prices displayed on its website. These new prices do not take into account the $7,500 federal credit granted since the beginning of the month for the purchase of a large number of electric vehicles. According to Dan Ives, an analyst at Wedbush, all of these discounts could boost deliveries by 12% to 15% in 2023.
This decline in prices comes after the statements of its CEO, Elon Musk, who warned that the possibility of an economic recession and raising interest rates may lead to price cuts in favor of volumes at the expense of profitability. Elon Musk also realized last year that prices for Tesla models had become “shamefully high” and that it could slow demand.
price war
Still, Tesla’s attack threatens to spark a price war in the auto industry, which is struggling to recover from the chip crisis and is just beginning a sharp shift toward electrification.
“This is a clear warning shot to European automakers and powerful US companies (General Motors and Ford) that Tesla will not play well in the sandbox,” Ives said. In the stock market, the European auto sector index fell nearly 2% Friday at the end of the session, the largest sectoral decline by far in a bull market.
some stabilization costs
In a message sent to AFP by a spokesperson in Europe, Tesla attributed the price drop in the region to price stability and the group’s growth.
“As we exit a year in which the supply chain was particularly disrupted, we did see some cost inflation stabilise, which gives us enough confidence to be able to pass that on to our customers,” he explains.
“As domestic production of our cars continues to expand and achieve new economies of scale globally, we are now making the Model 3 and Model Y even more accessible in Europe,” Tesla adds.
(with agencies)
Hobium, tricolor hydrogen car can reduce airfoil
The French manufacturer said on Friday that French start-up Hubium, which bills itself as the “Tesla of hydrogen” with the development of a luxury hydrogen sedan for 2025, may cut its workforce. The company is “analyzing its financing and cost structure, which could lead to a decrease in payroll after a significant hiring period that allowed for increased research and development efforts,” Hobbium said in a statement, confirming echoes of the information. “This reduction will depend on the final outline of the strategic plan being developed,” defines the company of about a hundred employees. Hopium office at the end of December appointed two experienced managers as General Manager and Deputy General Manager. The company’s young founder, racing driver Olivier Lombard, has been appointed Deputy General Manager in charge of the Hopium Machina.
This fuel-cell sports sedan project should be offered at around 120,000 euros and promises a range of up to 1,000 kilometers with 500 horsepower. It will be the first non-utility hydrogen vehicle to be produced in France. Its management said Friday that the company is now considering “various scenarios including the sequence and timing of commercializing the hopium machine and the possibility of commercializing or licensing its fuel cell first.”
Hopium also confirms that it “believes it can meet its estimated financing needs through June 30, 2023” and “continues to explore other sources of financing (…) including by market attraction and/or through industry partnerships”. At the end of September, the company announced the construction of a factory in Normandy, near Vernon, before presenting its prototype with great fanfare at the Paris Motor Show. It signed a memorandum of understanding with the subsidiary specialized in consumer credit of Credit Agricole Bank for the long-term delivery of 10,000 cars. Former Transport Minister Jean-Baptiste Jabbari also joined the structure as Chairman of its Board of Directors.
The startup, which was launched at the end of 2020 on the Paris Stock Exchange, saw its value double by four months, before returning on Friday near its initial value, at 6.43 euros. Hydrogen used as fuel has the advantage that it emits only water vapor, making it an important means of replacing hydrocarbons, integrated into many recovery plans around the world. But experts and industrialists are divided over the place of hydrogen in decarbonizing the automotive sector.
(AFP)
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