This Is Incredible! Tesla Price Cuts, Tax Subsidies, and Gas-Only Competitors - Now That's Amazing!

A lot of you have commented under my previous repot about last night’s Tesla’s massive price cuts in the United States and Canada by as much as 23% and have said very interesting things.

User SpykerSpeed has commented under my previous coverage about Tesla’s massive price cuts in the United States and Canada, writing “Tesla knows the car market is about to get slammed because of higher interest rates and surging supply of used vehicles. This is a great move, though, because it will hopefully increase sales even during an economic downturn.”

I agree. This is a smart move by Tesla. But it also may destroy used Tesla car prices, which Tesla will take a hit on. However, keep in mind that Tesla's mission is not about used car prices or how expensive they can charge but to make as many EVs as possible. By the way, if you want to see how much Tesla prices have changed after last night’s price cuts, either see my previous video coverage on the subject or visit us at TorqueNews.com to read Jeremy Johnson’s article detailing Tesla's new prices and comparing them with the old prices.

Dean McManis, a former Torque News EV and Tesla contributor, has commented writing “This is amazing news! Especially when combined with the federal subsidies (until March). This puts the base Model Y at $45.5K, and the Model 3 Performance at $46.5K if you qualify for the tax subsidies. This allows Tesla to actually compete on price once again compared with similar BEVs, and importantly they are now price competitive against gas-only vehicles that dominate sales today.”

Tru Hartwood commented, saying “No idea what this will do to TSLA but I'm super stoked to see EVs coming down to purchase price parity with ICE and that the Model Y won't have to change anything to quality for the tax credit. … I do want to see more ongoing ramping of production, as well as more factories announced so that when current factories are maxed out in the next couple years there's supply building elsewhere to keep the growth happening.”

I mean look, Tesla's US price reduction is so huge, it's going to put a great pressure on all the other car makers. Expect to see huge shakings in the US car market.

I also read some of your comments that you are ordering your Teslas now. One person writes "Ordered mine tonight, kinda upset hearing china had cuts and we didn't, great price and I pulled the trigger." Another person commented on the news of the new 2023 Tesla prices in the United States and wrote "Absolutely wonderful. I am going to buy the Model 3 immediately."

Other’s sare wishing those price cuts came to Australia. They say the Tesla prices in Australia are “super expensive. $69K~ AUD for a standard model 3.” That’s indeed super expensive.

Matador55 commented saying “I wonder about all the people who bought a car in December. I tried to get a Tesla Model Y performance and it was close to 80,000. Now 60,000, and people are going to be mad and happy.” Well, as user Kuznac Bendelejev responds, “if they bought it at that price, then they thought the price was the right deal.”

Some of our viewers are seeing a difference between the reasons why Tesla cut 2023 car prices in China and why it did in the United States. The user Dual Transition has commented, writing “Tesla cut prices in China because demand had crashed in December, so the cuts were more to maintain sales than grow them - brought prices in line with a myriad of competitors with offerings comparable to the Model 3 and Y (e.g. the BYD Seal). In the US and Europe a different story, should help to grow sales given the state of the competition. This gives a huge headache to Ford on the Mach E pricing, and VW on their ID-4 etc. Not good for Tesla margins and profits though, so stock price may very well fall to reflect that.” At the time of this reporting, Tesla stock is down about 6%.

Joseph Millikan writes that It's a smart business practice from Tesla, cutting prices for 2023. He says “More cars will be sold immediately.” I agree, and as Dharen Chada writes Tesla margins may reduce somewhat but higher turnover of capital will possibly result in at least maintaining ROIC and ROE.

Overall, Tesla observers see the massive price cut in the United States and Canada as a very positive move by Tesla. This move is expected to immediately increase Tesla sales. These massive price cuts should also put Tesla way ahead of its competition. Tesla is going to put a lot of pressure on the competition. Tesla can afford to make smaller margins for a long time. However, Tesla’s price cuts will greatly pressure GM and other EV makers in the US: particularly GM and VW. Ford is somewhat safe until the Cybertruck ramps.

Remember that These price cuts come after there were similar drastic reduction in prices in Tesla China recently. It's important to note that Tesla is trying to transition the world to sustainable Energy and their intention was never to have expensive cars that were unaffordable.

All Model Y vehicles, except the performance, will qualify for the $7,500 EV tax credit now because they are under the $55,000 limit. The 7 seater Model Y option is also $4,000 up from $3,000. There are Tweets from Canadian prices of Tesla where prices have significantly dropped too. The Model 3 SR will be getting an $8K rebate there.

I expect to see Tesla demand shoot through the roof in the U.S. now.

By the way Tesla prices decreased in Germany too.

* Model Y RWD: 44,880€ (from 56,990€, 21.2% drop)
* Model Y Long Range: 54,990€ (from 56,990€, 3.5% drop)
* Model Y Performance: 64,990€ (from 65,490€, 0.76% drop)
* Model 3 RWD: 49,990€ (from 43,990€, 12% drop)
* Model 3 LR: 53,990€ (from 59,490€, 9.2% drop)
* Model 3 P: 60,990€ (from 63,490€, 4% drop)

Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.