Volvo reacts to Tesla’s sharp price drop and says it doesn’t want to get into the American brand’s game. Like Volkswagen, Renault or even Fisker, the Swedish firm would not need it.
This is a case that has had the effect of a veritable bombshell in the automotive world. Although Tesla had always refused to give discounts, although its prices have long been used to changing, now the firm has decided to make an incredible drop in its prices. A real disaster for the Model 3 and Model Y rising to 13,000 euros, which follows a difficult year-end for the manufacturer despite record deliveries.
Drops, but not for everyone.
However, not all manufacturers want to join Tesla’s game, which it certainly hopes get some market share by making such a price reduction. The firm is also likely concerned about the rise of Chinese brands, which could hurt it in the coming months.
A competition that does not scare everyone, and less Volvo. Perhaps because the Swedish firm belongs since 2010 to the Chinese group Geely, which also owns Lynk & Co, Lotus and the young Geometry brand. Anyway, the manufacturer says loud and clear. has no intention of lowering its pricesas confirmed by Jim Rowan, general director of the brand, broadcast by the US agency Reuters.
No immediate need for Volvo
In effect, the director points out that “ we do not see [de baisses de prix] for now“, while explaining that” the demand is the highest we have seenand the order book too“. The brand, therefore, does not have to reduce its prices to attract customers, who already seem to be convinced. In fact, in its press release revealing its sales figures for 2022, Volvo announces revenue increased 17%despite a slightly lower EBIT margin of 6.8% versus 7.2% last year.
A small drop that is probably due to the rise in the cost of raw materials, and in particular lithium. In fact, the firm has considerably increased its registrations of electric cars, which represented 11% of total sales, compared to 4% last year. In the fourth quarter of 2022, this figure even reached 18%.
As a reminder, Volvo currently markets the XC40 and C40 Recharge and has just lifted the veil on the new EX90, replacing the XC90. Later, another compact SUV called EX30 will also see the light of day.
The autonomy-price relationship of the XC40 and C40 Recharge has been more interesting for a few weeks, thanks to the launch of a new motor coupled to a new battery.
But Volvo is not the only brand that refuses to participate in this price war. In fact, Volkswagen has decided not to lower the price of its ID.3, ID.4, ID.5 and ID. Buzz and even increased them last December. Porsche plans to raise the price of its cars by 6%, according to a dealer cited by automotive newsas it prepares for the launch of a future electric SUV situated above the Cayenne.
Renault does not want to lower its prices either
Finally, Renault also refuses to enter this game, while the firm explains that it does not have enough room for maneuver due to the high price of the battery. The only solution to make cars cheaper is then to reduce the size of the latter, while waiting for solid batteries. by his side, Fisker says his order book is already full and that discounts are not necessary.
On Tesla’s side, the saloon and the SUV can now take advantage of the ecological bonus of 5,000 euros in France, which should allow Elon Musk’s firm to attract new customers despite the twist that the Government has given it. Indeed, since January 1, only cars of less than 47,000 euros can benefit from the aid. But inevitably, this price drop did not take long to make competitors react Elon Musk’s brand.
This is particularly the case with Xpeng, VinFast or even Ford and Toyota, among others. Their common point? They have all decided to review their pricing strategy. While most have simply lowered the prices of their electric cars, Lucid has chosen to reduce the monthly rental payment for its Air sedan, which is equivalent to a discount of 7,500 euros. An amount that is identical to the tax credit proposed by the US government for electric cars manufactured in North America.
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