Tesla has lowered prices for consideration for its home electric vehicles by as much as 20%, coming up with an aggressive discounting proposal in an attempt to outpace rivals in the wake of missing out on Wall Street delivery estimates for 2022.
The move caused a 5.6 percent drop in Tesla’s stock prices after CEO Elon Musk said a recession and higher interest rates could force Tesla to reduce production in order to maintain sales.
Elon Musk acknowledged last year that prices were becoming alarmingly high and could damage sales in the long run.
Following the substantial reductions in offer across Europe, the U.S., Africa, and the Middle East following a series of cuts the previous year, demand is expected to reverse.
A decrease in cost inflation was a major factor in lowering costs in its top European market, a spokesperson for Tesla Germany stated, without specifying which costs had dropped.
Reuters reported that the U.S government cut the prices on the Model 3 sedan and the Model Y cross utility vehicle by up to 20 percent. The typical Model Y stopped costing $52,990, down from $65,990.
Before up to a $7,500 federal tax credit for electric cars came into effect at the beginning of January, that is not inclusive.