Tesla Massively Reduces Prices. Here Are the New Prices and Why They Did It

Tesla makes their vehicles more affordable in regions around the world

Not a Tesla App

Tesla dropped prices on all models in several countries, which should not be surprising. It's unlikely it has anything to do with the company's plummeting value on the stock market, a perceived lower demand, or an effort to qualify for tax credits. Tesla's entire price drop game plan was forecast just a few days ago by a Tesla executive in China.

Tesla does not have a communications department. All the company information comes from its website, social media accounts or Elon Musk's Twitter account. That's why it was worth finding a translation of a rare interview a Tesla vice president gave to the media in China on January 9, 2023.

When Tesla Executives Speak, You Should Listen

Tao Lin spoke to reporters just days after Tesla dropped the prices in China. Her answers provided reasons behind the lower prices, not only in China but worldwide. "Some media said that we lowered the price because we couldn't sell anymore. I think it's really nonsense," Lin said. "I personally think that the price adjustment reflects our better planning for the supply chain in a sense, and what level the vehicle cost will be, and then we make such adjustments according to this estimate."

Lin then explained, "The price adjustment of a product is actually a forecast of the company's cost changes in the next period of time. The biggest difference between 2023 and last year is that the epidemic has basically passed. We believe that the supply chain has returned to normal to a large extent, and there will be no such unpredictable shortages of materials as in previous years, which brought cost uncertainty."

Tesla Supply Chain Certainty Indicated in Q3

During the third quarter earnings call, Musk spoke about supply chain issues that had hampered production during the pandemic. But he also discussed how the company had advanced in other areas and was optimistic about future production. "What we are seeing is practical improvements as we redesign the whole supply chain and all of the elements that go into a battery cell. We're figuring out dramatic efficiencies."

Zachary Kirkhorn, Tesla's Chief Financial Officer, answered a question about the Inflation Reduction Act during that same earnings call. There were not many details available at that time. Still, he stated, "it's difficult to fully determine the eligibility criteria, but we believe Tesla is very well-positioned to capture a significant share of that for solar storage and also electric vehicles."

Tesla's Transparency is the Problem

Some customers in China who bought a Tesla just before the price cut were furious. That's likely to be the case in other countries as well. However, consumers need to remember that Tesla is a direct sales model. How quickly everyone forgets auto dealers have been changing prices for decades.

Lin gave this example, "for a traditional car, everyone buys it at a different price at a dealer, so you don't really know whether the price you bought is the lowest or not, and you don't know what price other people are buying. Is it fair to consumers?"

Tesla has not only changed the automotive industry by making electric vehicles a viable product, but it also changed how people buy cars. "We adopted some relatively new concepts, such as the direct sales model, such as price adjustment strategies, and we hope to gradually make everyone feel that these concepts are feasible. Under the direct sales model, the prices are completely open and transparent, without discounts or price increases, and everyone is the same at the same time."

Price Reductions in the U.S.

We suspected these price cuts were coming as the EV tax credit in the US listed all Model 3s and Model Ys as qualifying for the tax credit. All variations of the Model Y now qualify for the $7,500 tax credit in the US.

The price cuts also affect many countries around the world such as Spain, France and Portugal. Although the reduced pricing of the Model S and Model X appears to be limited.

Below is a list of the new and previous prices of all Teslas models in the US and the percentage changed.

Giga Small Haus - A Demo Home Powered by Solar and Powerwall 3

Not a Tesla App

Tesla recently showed off Giga Small Haus, an interesting new display project hosted at Giga Berlin. The small new house is located just outside the main entrance of Tesla’s Giga Berlin factory, with a Quicksilver Model Y parked inside.

Giga Small Haus is powered only by solar and Powerwall 3 - disconnected from the local grid and from Giga Berlin itself. It serves as a live demonstration of Tesla Solar and Tesla’s Powerwall battery backup.

Giga Small Haus

The centerpiece of the display is a Model Y in Quicksilver - a beautiful pick for a beautifully lit house. However, that’s not the real focus here - it's the Powerwall and Gateway on the wall.

The Powerwall is the focus of Giga Small Haus, and there’s a display with some additional information on the wall. Part of the display also includes a screen that displays the current output of the Powerwall itself versus the consumption of Giga Small Haus, as well as the input from solar.

The interior exhibit of Giga Small Haus

Not a Tesla App

The text on the exhibit is divided into several sections. Here’s a translated and edited version of what we can see from Tesla’s images. Some additional text is obscured. If someone visits Giga Small Haus, let us know.

Powerwall

Powerwall is a home battery system that stores energy from solar panels, the electrical grid, or during off-peak hours and powers your home during the day or during a power outage. 

With Powerwall, you can use self-generated solar energy during the day and night, thus avoiding high electricity costs. You can also store excess energy produced during sunny periods for use during times of low production or power outages.

Key Features

Energy Storage: Powerwall stores excess energy from solar panels or the grid for later use or during power outages.

Backup Power: In the event of a power outage, Powerwall automatically switches to battery power to ensure continuous power supply.

Integration: Powerwall can be seamlessly integrated with existing solar systems and other power sources.

Scalability: Multiple Powerwalls can be installed to meet higher energy storage needs.

Smart Energy Management: Powerwall works with Tesla's software to optimize energy consumption and reduce costs.

How Powerwall Works

Storage: During the day, when solar panels produce more energy than needed, the excess is stored in Powerwall.

Usage: At night or during times of low solar production, the stored energy is used to power the home, reducing reliance on the grid.

Backup: During a power outage, Powerwall automatically provides power to critical circuits, ensuring continuous operation of essential appliances.

Benefits

Cost Savings: By storing and using solar energy, you can reduce your electricity bills.

Reliability: Provides backup power during outages, ensuring your home remains powered.

Sustainability: Promotes the use of renewable energy by storing excess solar production for later use.

Overall, Giga Small Haus is an interesting real-life demo of what Powerwall and Solar can accomplish. It would be neat if Tesla built more of these displays - perhaps near major Delivery and Service Centers and at Giga Texas, Fremont, Giga Shanghai, and other facilities. Many Tesla owners have yet to learn about and experience some of Tesla’s Energy products.

Follow

Follow

Follow

Tesla Adds Acceleration Boost Option for 2024 Model 3

Not a Tesla App

Tesla has added the Acceleration Boost option to the Tesla store for owners of the 2024 Model 3 Long Range - specifically owners in Australia and China. Acceleration Boost is an upgrade that provides a significant performance boost, drastically narrowing the performance gap between the Long Range and Performance versions of the same model.

This upgrade will likely become available in Europe, Canada, and the United States in the next few days as Tesla updates its shops globally.

Acceleration Boost

This new Acceleration Boost is retailing for $3,000 AUD, or approximately $2,000 USD. That’s the same price for current owners of older Model 3 or Model Y Long Range vehicles, which all have the option to purchase Acceleration Boost through the shop.

The boost provides improved 0-100km/h (0-60mph) performance, bumping the 2024 Model 3 LR from 4.4s to 3.8s. The 2024 Performance version comes in at a blazing fast 2.9 seconds, so while it isn’t equivalent to just buying a performance variant in the first place, it is still a noticeable and significant upgrade.

Performance variants also come with a different front fascia vent for cooling, performance drive units, sport seats, adaptive suspension, 20-inch wheels, and Track Mode V3. That’s a significant number of additional features in the $10,000 USD price difference between the Long Range and Performance versions.

Should You Buy It?

If you’ve purchased a Long Range model and are itching to go just that little bit faster at every red light, this is the upgrade for you. It previously came with the cost of slightly reducing vehicle range, but the Tesla store doesn’t make a note of reduced range this time around. The 2023 Model 3 and Model Y Long Range models had an efficiency loss of about 5% due to the additional always-available acceleration and cooling. 

You could drive in Chill mode to mostly negate that efficiency loss, but what’s the fun in driving in Chill when you just got Acceleration Boost? Anyhow, the shop listing for the 2024 variant doesn’t include this detail, so it's possible Tesla may have worked some more engineering magic.

Overall, if you’ve got the $3,000 AUD burning a hole in your pocket, some Tesla referral credits sitting around, or just want to go faster, it's definitely an upgrade many users find valuable.

Follow

Follow

Follow