Electric car: Tesla slashes prices and risks triggering an auto tariff war
Price reductions of up to 20% in Europe and the United States 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 that are threatened by the deterioration of the economy, the increase in interest rates that make buying a car more expensive and the arrival of many competitors in the electric vehicle market. The group has cut its prices in China twice in recent months and has offered unusual promotions in North America through the end of 2022 for customers who agree to get a new car before the end of December. That was not enough to achieve his own goals. In 2022, the group delivered 1.31 million electric vehicles, representing a record and a jump of 40% within a year. But Elon Musk’s company has set itself the goal of increasing its deliveries in the long term by an average of 50% per year.
“This should really boost volumes in 2023 (from Tesla),” tweeted Gary Black, a Tesla investor who remained bullish on the company and its prospects despite the recent sharp decline in the share price on Friday. (-5%). “It was the right decision.”
In France, the Model 3 became eligible for an ecological bonus
There really is enough to boost sales. In France, the Model 3 drops from 8,500 euros to 44,990 euros, making the car eligible for an ecological bonus of 5,000 euros. In the United States, discounts ranged from 6% to 20% on the Model 3 and the Model Y, according to calculations made by Reuters on prices displayed on its website. These new prices do not take into account the federal credit of 7,500 dollars granted from the beginning of the month for the purchase of a large number of electric vehicles. According to Dan Ives, an analyst at Wedbush, all these discounts could boost deliveries by 12% to 15% in 2023.
The price drop came after statements by its chief executive, Elon Musk, who warned that the prospect of an economic recession and rising interest rates could lead to price cuts to favor volumes in cost of profitability. . Elon Musk also acknowledged last year that the prices of Tesla models have become “obscenely high” and that they could slow demand.
However, Tesla’s offensive threatens to ignite 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 US stalwarts (GM and Ford) that Tesla will not play nice in the sandbox,” Ives said. In the stock market, the index of the European automotive sector fell almost 2% on Friday at the end of the session, by far the biggest sectoral drop in a bull market.
Consolidation of some costs
In a message sent to AFP by a spokesperson in Europe, Tesla attributed the drop in prices in the area to stabilizing prices and group growth.
“As we come out of a year where the supply chain has been particularly disrupted, we have seen a stabilization in the inflation of some costs, which gives us enough confidence to pass it on to our customers”, was he there . explains.
“As the local production of our vehicles continues to expand and create new economies around the world, we are now making the Model 3 and Model Y more accessible in Europe,” Tesla added.
Hopium, tricolor hydrogen sedan can reduce airfoil
French startup Hopium, which sees itself as the “Tesla of hydrogen” by developing a luxury hydrogen sedan by 2025, may cut its workforce, the manufacturer said Friday. The company is “examining its funding and cost structure, which may lead to a reduction in payroll after a significant recruitment period that allows for increased R&D efforts,” Hopium said in a statement, confirming echoes of information. “This reduction will depend on the final outlines of the strategic plan developed”, refers to the company that has approximately one hundred employees. Hopium appointed at the end of December two experienced managers as general manager and deputy general manager. The company’s young founder, racing driver Olivier Lombard, was appointed deputy general manager in charge of Hopium Machina.
This sports sedan project powered by a fuel cell should be offered around del120,000 euros and promises a range of 1,000 kilometers for a power of 500 horsepower. It will be the first non-utility hydrogen vehicle produced in France. The company is now studying “various scenarios including the sequence and timing of commercialization of Hopium Machina, and the possibility of commercializing or licensing its fuel cell first,” its management said Friday .
Hopium also confirms that it “believes it will be able to meet its estimated funding needs until June 30, 2023” and “will continue to explore other sources of financing (…) including by appealing to the market , and/or through industry partnerships.”. The company announced at the end of September the construction of a factory in Normandy, near Vernon, before unveiling its prototype with great fanfare at the Paris Motor Show. It signed a memorandum of understanding there with Crédit Agricole’s consumer credit specialist subsidiary for the delivery of 10,000 sedans over a long period. Former transport minister Jean-Baptiste Djebbari has also joined the structure as chairman of its board of directors.
The action of the startup, which was launched at the end of 2020 on the Paris Stock Exchange, saw its value multiplied by four within months, before returning on Friday close to its initial value, at 6.43 euros. Hydrogen used as a fuel has the advantage that it only emits water vapor, making it an important method for replacing hydrocarbons, which has been incorporated into many recovery plans around the world. But experts and industrialists are divided on the place of hydrogen in the decarbonization of the automotive sector.