Tesla slashes the price of its electric cars by up to £9,100 with immediate effect

Tesla has announced it has lowered the price of its electric cars in the UK with immediate effect, likely sparking outrage from existing customers, especially the 16,000 who took delivery of vehicles at the higher price last month.

The US company announced it has slashed the price of both the Model 3 and Model Y by as much as £9,100 from today, citing “normalization of some of the cost of inflation.”

Similar surprise price cuts announced in China earlier this week sparked anger among existing Tesla customers, hundreds of whom stormed showrooms across the country to express their frustration at paying 24 percent more for the same cars just weeks earlier. .

The move is a double whammy for existing owners, with This is Money revealing earlier this week that demand for used Tesla cars has plummeted over the past four months, with the price of one-year-old units dropping by more than a fifth compared to their value in January 2022.

The Model Y SUV – the UK’s best-selling electric car last year and the third most bought new car across all fuel types – now starts from £44,990, and has cost customers £51,990 by Thursday evening.

The biggest discount is on the top-of-the-line Model Y Performance model, which now costs £59,990, up from previously costing just over £69,000.

As for the Tesla Model 3 – last year’s second most popular new battery electric car – the entry price now starts at £42,990.

This could boost demand for Tesla’s smallest car, with the price cut meaning the Model 3 now costs less than some of its biggest rivals.

It will undercut the Kia EV6 (from £45,245) by £2,255 and also cost £160 less than the entry-level Polestar 2 (from £43,150).

The biggest discount is on the top-of-the-range Model Y Performance model, now priced at £59,990, previously priced at just over £69,000

The Tesla Model 3 now starts at £42,990 after the price cuts, meaning it now costs less than some of its big rivals

In a statement released Friday morning, Tesla UK said: ‘Our focus on continuous product improvement through original engineering and manufacturing processes has further optimized our ability to make the best product at an industry-leading cost.

“As we come off a turbulent year of supply chain disruptions, we have observed a normalization of some of the cost inflation, which gives us confidence to pass it on to our customers.

“As local vehicle production continues to grow and we continue to achieve economies of scale globally, we are making Model 3 and Model Y even more accessible across EMEA [Europe, the Middle East and Africa].’

Protesters gather at a Tesla showroom in Chengdu, Sichuan, China, on January 6, after the brand announced huge price cuts on its new cars

Crowds also gathered at the showroom in Chengdu. Protesters criticized the Tesla Model Y and Model 3’s sudden discounts, claiming they missed the price cuts

Demonstrators outside a Tesla showroom in Chengdu, Sichuan, China, on January 6, 2023

While the price cuts are good news for buyers looking to order a Tesla starting today, it’s irritating thousands of customers who’ve bought the brand’s electric cars in recent months.

This includes 16,368 drivers who took delivery of a huge shipment of vehicles that arrived in December, 10,664 of which were Model Y SUVs and the remaining 5,704 Model 3 sedans.

The value of used electric cars is in free fall

Valuation data from This is Money suggests that demand for used EVs is declining – and that’s impacting Teslas the most.

The price of a year-old Model 3 is down 21.4% compared to what it would have been valued at in January 2022, while the Model S is down 20.5%, translating to a financial loss of nearly £18,000.

The Model X crossover is also down 12.9% in a year.

– Read the full report on used electric car values

It means UK customers who received their Tesla last month could have saved around £130m if they had postponed their purchases until January.

This latest move is likely to increase tensions between customers and Elon Musk’s brand.

Many Tesla drivers were already irate about their ownership experience over Christmas, as they were forced to wait for hours for available charging points while trying to visit friends and family during the holiday season.

Today’s surprise price cuts follow similar cuts announced in China earlier this week.

This sparked angry protests at Tesla dealerships across the country as new owners demand discounts after seeing the price they paid for their cars drop by as much as 24 percent.

This is Money has contacted Tesla UK for further comment on whether it plans to refund customers who took delivery of cars in December. We have not yet received an official response.

The price cuts will be a double blow to those who have taken delivery of Teslas in recent months and who are already seeing the value of their cars in free fall.

According to valuation data provided to us by Cap HPI, a one-year-old Model 3 with 10,000 miles on it is worth £36,300.

Some 12 months earlier, a Model 3 of the same description was valued at £46,200.

That’s a drop in value of 21.4 per cent, or £9,400.

Pre-owned Model S saloons have seen a similar level of depreciation, with an average fall of £17,916 over the past year, from £87,266 in January 2022 to £69,350 today – a drop of 20.5 per cent.

The Model X is also down 12.9 per cent, translating to a financial loss of £12,829.