Today Tesla Just Added Even More Discounts and Incentives
Tesla’s sudden price lowering has sent a shudder through other EV makers’ plans. It has resulted in more Tesla sales, with rivals dropping prices in kind. Even Tesla’s share price is moving up the ladder. So today it added even more discounts and incentives that seem to be creating an EV price war.
How do the Tesla discounts work?
Tesla announced its “Ownership Loyalty Offer,” reducing the price of new Model S and Model Y EVs by $3,000. That, or it is offering free Supercharging incentives for up to three years. These fall on the heels of its recent discounts for Model 3 and Model Y sedans. The only catch is that buyers need to trade in their current Tesla, and they must do it before the offers expire sometime “in February.”
Tesla is now contacting current owners who have inquired about trading in or test-driving a new Tesla. Ownership Loyalty Team members make these offers through follow-up phone calls. And the offers are added on top of the discounts Tesla began at the beginning of 2023.
How are the Tesla discounts affecting the EV industry?
The original discounts effectively lower the price of a new Tesla by $20,000 when adding government incentives. So now with this latest offer, they are hitting $23,000 if one opts for the discount rather than free Supercharging. This isn’t the first time that Tesla has offered free Supercharging as an incentive to move the iron.
Tesla’s discounts which started earlier this month, have triggered other EV makers to respond in kind. Just this morning Ford announced it is cutting the price of its popular Mustang Mach-E EV up to $5,900. And just two days ago Chevrolet began offering a $5,700 discount on the remaining new 2022 Bolt EVs. And 2023 Bolts have a slightly lower $5,000 discount for the month of January.
These offers are transparently a move to retain Tesla owners rather than have them switch to rival EV makers. But this also plays into Tesla’s larger goal as declared by CEO Elon Musk. While it is shooting for 1.8 million sales in 2023, Musk wants to see the company hit two million cars.
What prompted Tesla to begin discounts?
Before announcing the first round of discounts, Tesla was seeing danger signs. Its share of the EV market was declining In 2021, Tesla held a 70.3 percent market share. But for 2022 that dropped to 63.5 percent. S&P Global Mobility said, “Tesla’s position is changing as new, more affordable options arrive, offering equal or better technology and production build.” The only EV segments it didn’t lead were those it didn’t have models for, which are affordable EVs and EV trucks.
And its stock price is up 33 percent in just this month alone. So the EV maker that doesn’t discount and doesn’t advertise is doubling down on discounts. Will Tesla billboards or Super Bowl commercials be next?