Prepare to see a lot of Tesla on the road in 2023

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Tesla price change in 2023, and with the new prices, one thing seems clear: the market will be flooded with Model 3 and Model Y. Let’s go back to why and how in this file.

The Tesla Model Y manufactured at the Gigafactory in Austin, Texas // Source: Tesla

Tesla turned the market upside down in early 2023. In fact, with significant price drops on the Model 3 and Model Y, it’s the great profitability of certain Teslas at a price that makes them eligible for the maximum green bonus. The big question of the moment is therefore: why did Tesla lower its prices around the world?

We are going to return in detail to the reasons for this fall, which was after all expected, trying to explain Tesla’s behavior. In addition, we will indicate why, in our opinion, Tesla’s 2023 is going to be the year of all records, despite the increasingly tough competition.

A year 2022 in halftone

In March 2022, we wrote about the end of the Tesla Model 3 at a royalty price in France, marking the end of a rather rare phenomenon. In practice, the 2022 Tesla Model 3 was up to 40% more expensive than the previous year, with an equivalent configuration. This was felt naturally at the level of sales in France, and this phenomenon was accentuated by the arrival of another less expensive Tesla at the end of the summer.

This is, of course, the Tesla Model Y Propulsion, which has shaken up the Elon Musk rhyme vehicle market in France a bit more. As incomprehensible as it may seem, we had a range that started at 49,990 euros with the Tesla Model Y Propulsion, and the Tesla Model 3 Propulsion was shown at a price starting at 53,490 euros, through the end of 2022.

With many advantages over the Model 3, the Model Y came to seize a share of the sedan market, which was rebuffed by its price, which was hard to justify in France. We also pointed out during the last few weeks of the year that there was a colossal stock of vehicles, forcing Tesla to sometimes offer Superchargers for free, sometimes options, and even going so far as to lower prices to try to trigger last-minute purchases.

But that’s not enough for Tesla, which now has several gigafactories running at full speed. Also, the year 2022 ended with a gap between sales and production of almost 35,000 vehicles, which is clearly new for the firm. How to ensure that you sell an estimated production of more than 1.5 million vehicles in 2023? The answer may not surprise you…

In 2023, Tesla wants to sell en masse

On January 13, 2023, Tesla has carried out a price review of its entire range worldwide, and France was not spared. If recent buyers necessarily suffer, future Tesla owners can only be delighted: The Tesla Model Y and Model 3 have returned at prices we haven’t seen in a long time.

What was a Franco-French phenomenon in 2021 has gone global, as prices fell between $3,000 and $13,000 in the US in particular, and similar amounts in China, showing that Tesla had a lot on hand. to make sure you fill your order book. .

If we focus a little more on France, the two most popular Tesla models (3 and Y), have seen their prices drop, but without taking into account the ecological bonus, this is only part of the equationas you can see below.

Vehicle Price before 01/13/23 Price as of 01/13/23
Tesla Model 3 Propulsion €53,490 €44,990
Tesla Model 3 Long Range €62,490 €52,990
Tesla Model 3 Performance €66,490 €59,990
Tesla Model Y Propulsion €49,990 €46,990
Tesla model Y long range €64,990 €53,990
Tesla Model Y Performance €69,990 €63,990

Thus, the Tesla Model Y Propulsion, in essence, had a reduction of 3,000 euros, but in practice for the client, in fact, it is 6,000 euros that must be deducted from the invoice, thanks to the current ecological bonus. Indeed, for vehicles with a price of less than 47,000 euros, in 2023 the ecological bonus of 5,000 euros will be applied. In 2022, the Tesla Model Y Propulsion exceeded 47,000 euros, and the latter could only qualify for the bonus of 2,000 euros. The price to be paid by the end customer is thus 41,990 euros in 2023, compared to 47,990 euros in 2022..

For the Tesla Model 3 Propulsion, the gap is even more staggering. Proposed at 53,490 euros in 2022, including the ecological bonus of 2,000 euros, 51,490 euros had to be paid to get the electric saloon. As of today, the price to pay is only 39,990 euros, or 11,500 euros less from one day to the next.

Among the other big differences, we can mention the Tesla Model Y Grande Autonomie, which is available today for 53,990 euros, compared to 64,990 euros a few days ago. There is no doubt that second-hand sellers will have to adjust to the new prices, which sometimes become cheaper than the prices displayed on classified ad sites.

Buying a Tesla becomes the default purchase

In the world of electric vehicles, who is capable of offering a main vehicle for a household for less than 40,000 euros in France? In 2022, even the Tesla Model 3 Propulsion no longer fits into this category, but in 2023, it returns to 39,990 euros including the ecological bonus.

Opposite, many manufacturers will undoubtedly feel the blow. With higher prices and incredible delays, how can we not see many customers fleeing to Tesla’s new electric vehicles, which will be available in a few weeks?

Among the competitors of the Tesla Model 3 Propulsion, we can mention in particular the Renault Mégane E-Tech, the BMW i4, the Mercedes EQE or the Hyundai Ioniq 6. All these vehicles have one or more points in common among the following: they are more expensive , have less autonomy, or are available with such delays that some buyers will pass through their way.

The parking lot of the Tesla center in Val d’Europe // Source: Bob JOUY for Frandroid

For the Tesla Model Y Propulsion, the situation is similar. The Volkswagen ID.4, Kia EV6, Hyundai Ioniq 5 and other Audi Q4 e-tron cannot compete on the three points of price, autonomy and availability. Thus, Tesla is putting pressure on its competitors in 2023, by proving that the Tesla Model Y is here to sell out en massein Europe as elsewhere.

The American manufacturer can afford to adopt such a policy, given that the margin per vehicle is among the highest in the market – a kind of Apple car. The rest of the manufacturers tend to do the opposite in recent months, with repeated price increases for almost the entire industry.

The Chinese giant BYD, arguably Tesla’s biggest competitor and biggest threat right now, had no choice but to raise prices in early January in China. In response, Tesla lowered its prices, once again proving to the local market that its Shanghai factory is there to flood the market.

Crossing a Tesla will be less and less rare

With all these price drops, The Tesla Model 3 and Model Y will undoubtedly become the good plans of the year 2023, especially considering the standard equipment. In addition to its relatively fast recharging capacity and its high performance in terms of driving pleasure, we find a heat pump, leatherette upholstery with profile memory for the driver, heated seats and steering wheel, double glazing and an electric rear trunk in all Tesla. no need to select any option.

Add to that Autopilot, remote updates and Supercharger network integration into navigation, and you understand that the rest of the industry has a long way to go to catch up with Tesla in 2023.

Two Tesla Model Y in Supercharge // Source: Bob JOUY for Frandroid

This early 2023 price drop therefore comes at the worst time for almost all of Tesla’s competitors., but if they had the same level of information that we do, this drop was indeed expected. Sure enough, we were still talking about it in the final weeks of 2022, but with production breaking record after record every quarter, it was not conceivable that Tesla would continue with such high prices, given demand that was starting to weaken a bit.

Therefore, the question that remains unanswered for the moment concerns the sales volumes as well as profits taking into account the new ratesquestion to which the first answers will appear during the closing balance of the quarter of 2023. The Tesla Model Y is still heralded as the future best-selling vehicle on the planet according to Elon Muskand it’s clear that Tesla is on the right track.

With a Gigafactory in Shanghai churning out more vehicles, factories in Berlin and Austin expanding, and a factory in Fremont already full, Tesla seems to have fixed its demand problem even before it appeared. With the new rates around the planet, there is no doubt that the Texan firm manages to sell all its production.

Furthermore, 2023 could be the year of the arrival of new models for Tesla, in particular the Cybertruck in the US, which is strongly expected to revolutionize the electric pickup market. For Europe, it is highly unlikely that a new model will arrive during the year. However, improvements to the Tesla Model 3 and Model Y will no doubt make their way to the old world, perhaps even in the form of new 4680-format battery packs, which will still allow Tesla to reduce its production costs and perhaps pass them on to the end customer.

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