Business

Tesla cuts prices further in Irish market

Electric vehicle manufacturer is looking to kickstart stalling demand in market with ever-growing competition

Tesla has again been cutting the prices of its big-selling Model Y and Model 3 electric cars in Ireland. Photograph: David Zalubowski/AP

Neil Briscoe
Tue Apr 30 2024 - 05:00

Tesla has again been cutting the prices of its biggest-selling Model Y and Model 3 electric cars around the world in response to a continuing stalling of global electric car sales, and ever-increasing competition from Chinese brands.

The move is affecting the entire electric car market, especially the residual values of the existing EV fleet, and causing yet more consternation among electric car owners.

The price of a basic Model 3 saloon in Ireland now stands at €40,990 for the most affordable rear-drive standard range version, with a range of 513km. That is €4,000 below the price of the competitive BYD Seal electric saloon, and more than €15,000 cheaper than a Volkswagen ID.7 (which, has more range and is a bigger car).

The Model Y now costs from €44,990 for the rear-drive standard range model with 455km range, down €2,000 on the price in January last year.

READ MORE

Both models cost comfortably above the €50,000 mark before significant cuts were introduced in January of last year.

The move has sent ripples across global car markets, and even though many car makers say that they will not engage in a price war with Tesla, several have cut the prices of key electric models in the past months, and may have to again.

That’s not entirely down to Tesla, though. In the UK for example, the government’s minimum EV sales mandate has forced car makers to savagely discount the finance costs of electric models in order to try to keep up with the law that says 10 per cent of total car sales must be all-electric models. Most brands are currently well behind that figure.

Nonetheless, Tesla is seen as the market leader – last year, the Model Y was the bestselling single model in the world – and so where Elon Musk leads, others will follow.

We feel when Tesla drop prices in the Irish market, there’s an instant reaction from the other brands to do the same

—  Adrian Slattery

What effect will Tesla’s price moves have in the Irish market?

There has already been a round of significant new EV price cuts here over the past few months, but Adrian Slattery from electric car subscriptions firm DCEV told The Irish Times that the effects will spread further than that.

“We feel when Tesla drop prices in the Irish market, there’s an instant reaction from the other brands to do the same,” said Mr Slattery. “Tesla worldwide figures are down in the first quarter and [they] have had a number of lay-offs. Just this week Polestar dropped their prices again in Ireland and the rest will follow. Tesla seem to be the conductor of the EV market and that’s just a fact.

“The upside is for the new buyer. Also, brands are offering 0 per cent finance to get people in the door.

“Tesla is also feeling the pinch from the chasing Chinese brands. We think it’s getting more confusing for customers with all the volatility. The trust in brands needs to stabilise or else the stall to buy will continue.”

How will the used market fare in the face of Tesla’s latest price cuts? Merlin O’Reilly, from leading car auctioneers Merlin Auctions, told The Irish Times that the precise effect from the latest cuts will be small, but the damage has already been done.

“There has not been much noise in Ireland as such about the recent Tesla price reductions thus far” said O’Reilly. “I still believe that anyone who has bought a car with a plug so far, is in serious trouble with depreciation. And with price reductions still continuing, in various guises, their depreciation woes are not over.

“Zero per cent interest, preregistered discounted models and straightforward price drops are ongoing in this market and the people are beginning to realise that the current path may not be the way forward. The Beijing motor show is on this week and China is the country that will cause the European motor industry the most trouble ever, unless we look in another direction.”

However, Stella Li, the head of European operations for Chinese car making giant BYD, told The Irish Times that her brand would not be drawn into a Tesla price-chase.

“I want to be seen as a technology company” said Ms Li. “Technology is the new luxury, the new premium where cars are concerned. So we’re not necessarily positioning on making the price cheaper, cheaper and cheaper all the time. We choose our financial model and we don’t want to engage with price cuts.”

[ Tesla shares rebound, but doubts remain ]

Mr Musk’s moves on prices have certainly boosted Tesla’s sales worldwide since they started last year. Tesla’s sales in Ireland are up 8.64 per cent January to March this year compared to last year. And 2023 saw sales of 3,371, up 156 per cent on the previous year. Clearly demand remains, even if prices are fluctuating.

However, the moves – and the apparent abandoning of the much-anticipated affordable Model 2 – have hit Tesla’s share price hard in recent weeks, and the announcement that its profits have halved for the first three months of this year, compared to 2023, certainly spooked investors.

The Tesla stock price did rally in the wake of an announcement from Mr Musk that the company is working on new, more affordable, models to be launched in early 2025.

The Irish Times contacted Tesla for comment on its pricing decision, and whether we could expect more price cuts in the coming year, but no response has been received.

Neil Briscoe

Neil Briscoe

Neil Briscoe, a contributor to The Irish Times, specialises in motoring

LATEST STORIES