Why the prices of the new Tesla Model 3 could quickly drop?

It’s a familiar story in the world of electric car price promises and expectations. Elon Musk, the charismatic CEO of Tesla, had aroused the excitement of the media and financial analysts by announcing that the new Model 3 would be cheaper than the previous one. However, when the reveal of the new model took place on the 1^is September 2023, it is rather the opposite effect that took place, with an increase in prices in several markets.

In Europe, for example, prices have risen by 1000 euros for the Propulsion version. In Asia, prices have also increased, while in the United States, frustration is mounting, because the new version is still not available for production reasons, this model being, for the moment, made in China and escaping therefore to US protectionist subsidies.

Tesla will soon lower its prices in China

The anger was particularly evident in China, where the Model 3 Propulsion is sold at the list price of 259,900 yuan, or around 33,200 euros. It may seem like a good deal compared to the 42,990 euros in France claimed in France, but the additional cost compared to the old version is about 12% in Chinawhich is in total contradiction with the promises of Elon Musk.

Faced with this growing anger, Tesla China suggested that once stocks of the old Model 3 Propulsion run out, the prices of the new version could drop to around 200,000 yuan, or around 25,500 euros. This reduction is planned for the fourth quarter of 2023. For example, the Long Autonomy version is already 5,000 euros cheaper than the previous one, with a price of 295,900 yuan, or 37,800 euros, compared to 50,990 euros in France .

A strategy to sell stocks of the old model?

Generally, when a drop takes place in a market at Tesla, especially in China, it follows everywhere in the world, also in Europe. Tesla has shown in the past its ability to adjust its prices according to markets and demand, it is therefore possible that prices in Europe will also experience adjustments in the future.

Demand for this model should be strong and Tesla probably wants to direct customers to the “old” Model 3 first to empty its stocks with more attractive prices compared to the new model. Once the stocks of the old version have expired, the restyled Model 3 should readjust its prices.

Remember, however, that the prices of the Model 3 in Europe are however quite low, in the sense that the Model 3 traded almost 13,000 euros more expensive last year (taking into account the absence of the ecological bonus, since she was excluded).

In France, even if the prices of the Tesla Model 3 drop, with the arrival of the new 2024 bonus and the consideration of the carbon footprint, the American sedan could lose its bonus next year. Thus, even if the frontage price is set to fall over the next few months, the loss of the bonus next year should however increase the final bill in France.

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