Last year was supposed to be a banner year for Tesla. The company was spinning up new factories while expanding existing ones, continually raising the prices on its cars without seeing a drop in demand. Expectations were high for the top-selling EV maker in the United States. Then it all came tumbling down.
Now, Tesla is on its back foot. Its stock is crashing, its investors are fighting with — or suing — its CEO, and the company is missing those lofty sales targets it set for itself when times were good. As conditions have changed, so has Tesla’s tune — now the once-cocksure, confident startup is starting to look a bit desperate. But desperation breeds ingenuity, and it seems the company is trying to recapture its halcyon days with a new trick: Lowering prices.
Tesla has slashed prices across its lineup, cutting the MSRP on every single model it sells. The base Model 3 gets the lightest discount, dropping its purchase price by 6 percent to come in at $43,990, while the base Model Y loses an astonishing 20 percent from its cost. Last week, the midsize crossover cost $65,990; today it’s just $52,990.
Tesla has always shown a willingness to change its prices on impulse, following trends in the market, but these cuts are steep. Only two models — the base Model 3 and Model X — now sit within 10% of their former purchase prices. In fact, these discounts are so severe that they undercut the used market — AutoTrader lists 584 used base Model Y crossovers that now cost more than an equivalent brand-new car.
These discounts come immediately after the company was shamed by investors for missing sales targets, and one can’t help but think they’re a direct response. Between Musk’s antics and an ever-growing field of competition, Tesla can’t rely on its cult of personality to make sales the way it could in years past. Now, the company has to truly compete.