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

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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.

Tesla Holiday Update Wishlist - Entertainment Edition

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As the holiday season kicks off, it’s time to turn our attention to our Christmas list of items we’d love to see in Tesla’s annual Holiday update—a tradition that brings some of the most exciting software features of the year. From game-changing additions to fun surprises, the Holiday update has become the most anticipated update each year.

This year’s update promises to be no exception, with Blind Spot Monitoring While Parked already leaking in an employee release earlier this month.

So, grab your hot cocoa and cozy up—it’s time to see what Tesla might have in store for the most wonderful time of the year.

Smart Voice Assistant

Tesla’s current system is a list of voice commands that, while useful, leaves a lot to be desired when compared to modern voice assistants such as Google Assistant and even Alexa. However, a smart voice assistant based on an LLM that uses AI like xAI’s Grok could be coming this season. Elon previously confirmed that Grok would make its way into Tesla vehicles—and what better time than the Holiday season?

Hi-Fi Audio & Dolby Surround Support

Previously, we saw a bug where Apple Music began showing as HiFi for certain tracks in July. We assumed that Tesla would eventually support lossless Hi-Fi audio streaming, but so far, TIDAL remains the only streaming option with high-quality streaming.

Bringing Dolby Atmos support to Tesla vehicles would make even better use of Tesla’s jaw-dropping soundstages. Dolby Atmos delivers an immersive, 360-degree music experience, making it feel like the sound is coming from all around you. This would be the perfect Holiday update feature to make those bells truly jingle.

Tesla already has several music streaming services that support Dolby Atmos, such as Amazon Music and Apple Music, while a couple of other manufacturers, such as Rivian, launched support for Atmos it this summer.

Pandora Music

Tesla has been on a roll with adding music streaming services over the last couple of years. Tesla most recently launched Amazon Music and YouTube Music support. While the biggest players have now been incorporated into Teslas, many users would still love to see Pandora added to the mix.

Adding additional music services means that more users subscribe to Tesla’s Premium Connectivity package, so expect this one to be added as well.

SiriusXM Streaming

While SiriusXM is already available in the Model S and Model X through a satellite receiver, SiriusXM may soon be available to a lot more users. We previously reported on SiriusXM mistakenly publishing a web post revealing a web streaming version of SiriusXM for Teslas, and it has been a few months since then. It's a quick update and seems to have already been partially implemented, given SiriusXM’s website. We could expect this wishlist item to be real, and hopefully soon.

Prime Video

While video streaming integration is much less important than music streaming, it still serves its purpose, especially in vehicles with a rear screen, where videos can be watched while the vehicle is in motion. With Tesla’s addition of Amazon Music this summer, we expect Tesla to add Amazon Prime Video as well.

X Integration

While you can pop open X pretty quickly in the web browser and have a fairly OK browsing experience, it's clear the site is designed for use with a mouse, not your fingers. A dedicated X app would definitely be easier for fans of the platform. Don’t forget to follow us on X or your favorite network (we’re “NotATeslaApp” on just about all of them, including Facebook, Threads, and Bluesky).

Productivity Apps

Zoom is the highlight of Tesla’s productivity apps—and it’s also the only one. With YouTube Music recently arriving, we could see Google Hangouts, Google Meet, and even Microsoft Teams making inroads as productivity applications to have in your Tesla. However, that’s only the tip of the iceberg.

Tesla App Store

While a suite of productivity apps would be a nice addition, it’s likely not a practical solution for Tesla. With so many available services, it would be a challenge to integrate each one individually.

Elon Musk once hinted at the possibility of an App Store for Tesla vehicles, where developers could create apps specifically designed for Teslas. However, we haven’t seen this come to fruition yet. So, the question remains: Is Tesla still working on an App Store, or is the expectation that users will rely on tablets and computers in their cars?

If Tesla does plan to launch an App Store, they would need to find a way to leverage existing platforms instead of building each app from scratch. One possibility is running Android apps through an emulation layer, allowing access to a wide array of apps from the Google Play Store, such as video streaming, video conferencing, and messaging platforms like Discord and Slack.

Another approach, similar to what Tesla already does with video streaming services, could involve using web-based versions of apps. While many services offer web versions, not all perform as well or provide the same functionality as native apps.

Both solutions are feasible, but we have to consider: What does Tesla gain by allowing users to run any existing apps on the car’s screen instead of using a separate device? While such apps could be useful, we believe Tesla will likely focus on integrating them where it makes sense—like music services—where a custom implementation improves the user experience and keeps the user interface consistent between services. For most other apps, users will probably continue to rely on their phones and other nearby devices.

Steam Games on AMD Vehicles

Tesla previously removed games from its vehicles, as it removed the dedicated gaming GPU in favor of AMD’s all-purpose APU. However, the all-purpose APU can hold its own while gaming, and in fact, the 45-watt 4-core Ryzen chip is fairly beefy. It could definitely hold its own against the mobile Steam Deck, especially since that also uses an AMD-based platform.

Using Valve’s Proton Compatibility Layer would allow AMD Teslas to game, and game pretty well!

This is our third wishlist in our series of features we’d love to be included in this year’s Holiday update. It shouldn’t be too long before we find out exactly what’s in it, but for now, keep those requests coming!

Wishlist 1 - Tesla App Edition

Wishlist 2 - Tesla Maps & Autopilot Edition

Wishlist 3 - Tesla Entertainment Edition

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Incoming U.S. Administration to Set Federal Rules for Robotaxi

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According to a recently published article by Bloomberg, the Trump administration intends to introduce a federal framework for autonomous vehicles. According to members of the administrative transition team, this new framework will be part of the Transportation Department’s list of priorities.

This places Tesla in a good position to begin working towards establishing and expanding its Robotaxi network and getting production, validation, and approval of the Cybercab off the ground.

Legal Limits

Today’s laws have fairly strict requirements for any vehicle that travels on the road—it needs to have steering wheels, pedals, mirrors, and plenty of driver-awareness or driver-assistance safety features. None of these are needed on a Robotaxi, and Tesla’s Cybercab also has none of these items. Instead, with no pedals and no steering wheel, it takes passengers from origin to destination with minimal user input.

The framework for autonomous vehicles could be spearheaded by former Uber executive Emil Michael, who could potentially take on the Transportation Department under the new administration. Uber previously worked on their autonomy program and is potentially a direct competitor to Tesla’s Robotaxi network.

The current regulation, in addition to having stringent hardware requirements, caps the number of autonomous vehicles a single company can operate at 2,500 units per year. This could drastically limit how Tesla’s Robotaxi network functions, especially since it doesn’t need additional high-resolution mapping to work in a specific location. FSD is extremely adaptable and learns on the fly.

Rather than deploying just a couple thousand units a year, Tesla needs to be able to deploy tens of thousands - the more units on the road, the faster they can collect data and iterate, especially with the recent deployment of their new Cortex Supercomputer.

State Laws

There’s one more obstacle to the mass deployment of autonomous vehicles—state regulations. Every state has its own set of regulations, and even with federal guidance and regulations becoming less limiting and more open, every state can choose to establish exactly how much autonomy it wants.

Tesla and other companies like Waymo, which are pursuing autonomous transportation, will have to navigate a regulatory maze to get their vehicles approved at a state-by-state level.

Tesla has already taken steps to get its Robotaxi network off the ground in Palo Alto, an affluent city that has been struggling to provide affordable transportation for its residents. With looser federal regulations, Elon’s timeline of deployments in Texas and California by late 2025 may move even sooner.

This is definitely a framework to watch — with Tesla’s stock up 8% this morning on the news, unsupervised FSD and Robotaxi could be coming quicker than anyone expects.

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