Tesla has recently made the Model Y more affordable in several European countries, following a prior price reduction in China.
The changes are quite significant, amounting to reductions of at least several percent. In Germany, which is Europe’s largest car market, the Model Y is now up to about 9% cheaper.
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Tesla Model Y is Europe’s best-selling EV.
In 2023, the Tesla Model Y was Europe’s best-selling all-electric car, although it seems that the prices have to be adjusted to the current market situation. The model is produced locally in Germany.
According to Reuters, the new prices of the Model Y in Germany are as follows:
- Long Range RWD: €42,990 – down €1,900 or 4.2%
- Long Range AWD: €49,990 ($54,340) – down €5,000 or 9%
- Performance: €55,990 – down €5,000 or 8.1%
Tesla has not provided an explanation for the price reductions, but it is known that the company’s overall new registrations (including sales) in Germany decreased by 9% year-over-year in 2023. The Model Y accounts for 45,818 registrations (up 29%) out of the total 63,685 (down 9%).
The news of the price changes comes shortly after it was reported that the Tesla Giga Berlin-Brandenburg plant in Grünheide near Berlin, Germany will suspend most of its Model Y production for about two weeks due to supply chain issues related to conflicts in the Red Sea area.
The reductions in Germany and many other European countries have resulted in the Model Y being priced similarly to the latest Model 3, which is imported from China. The Model 3 RWD costs the same as the Model Y RWD, while the Model 3 Long Range AWD is slightly more expensive than the Model Y Long Range AWD.
The price reduction for the Tesla Model Y in other European countries appears to range between several percent to over 10%.
Supply and Demand
According to Troy Teslike’s Tesla-focused data research, Tesla Model Y deliveries in Europe peaked in Q1 2023 and have been declining every quarter since. The report indicates that the year ended with approximately 32,000 unsold Model Y in Europe sitting in its inventory (including the 10-day production pause at the Giga Berlin in December).
If these numbers are accurate, then the price reduction and an additional production pause in January-February seem reasonable, being more or less directly related to supply and demand.
For comparison, in the U.S. and China, quarterly deliveries of the Model Y were still increasing from quarter to quarter.
It is worth noting that earlier this month, Tesla also reduced the prices of the Model 3 and Model Y in China by up to several percent. This raises the question of whether we will see a similar move at some point in the U.S. this quarter.
Prices of Tesla Model 3/Model Y in China (compared to November 2023):
- Model 3 RWD (LFP): $34,523 (245,900 CNY) – down 15,500 CNY or 5.9%
- Model 3 Performance: $40,138 (285,900 CNY) – down 11,500 CNY or 3.9%
- Model Y RWD (LFP): $36,348 (258,900 CNY) – down 7,500 CNY or 2.8%
- Model Y Long Range AWD: $42,104 (299,900 CNY) – down 2,500 CNY or 0.8%
- Model Y Performance: $51,089 (363,900 CNY) – no change
China seems to be the largest single market for the Tesla Model Y in recent quarters, even ahead of the U.S.