WASHINGTON (dpa-AFX) - Elon Musk's Tesla (TSLA) has announced a $1,000 price reduction on its Model Y rear-wheel drive and long-range models in the U.S. The price adjustment, effective until February 29th, is reportedly in response to seasonal fluctuations in customer demand.
Musk stated on the website, 'Since most people don't love to buy cars in the middle of winter, Tesla is offering a $1000 incentive to do so. This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal.'
After discount, Model Y rear-wheel drive and long-range is now available at $42,990 and $47,990, respectively. However, Model Y Performance's price remains unchanged at $52,490.
The company further stated that the prices would increase on March 1 by $1,000 or more.
Earlier, the automaker had cut prices of Model Y and Model S in China, followed by larger Model Y price cuts in Germany as car production in its Berlin factory was suspended after the shipping disruptions by the Red Sea attacks caused shortage of components.
In January, Tesla reported that 485,000 cars were delivered during the fourth quarter of last year. However, the profit was offset by decreased demands, increased costs of artificial intelligence-linked projects, and a series of price cuts. The company also warned of 'notably lower' vehicle delivery growth rates in 2024 compared to the last year.
The cooling of EV demands had led other firms also to slash prices. Last week, Rivian (RIVN) cut the prices of its R1T pickup and R1S SUV by $3,100, to $71,700 and $76,700, respectively.
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