Tesla aims to dispose of Model Y with temporary price reduction.
Tesla, a renowned car manufacturer, is finding it challenging to sell their vehicles in Germany. To resolve this issue, they're offering discounts on previously produced Model Y cars. However, customers will have to accept these vehicles as they are, with the added comment that they've been sitting in the sun.
Tesla, the American carmaker, has taken drastic measures to increase sales of their Model Y vehicles in Germany. The vehicle's price has been slashed by 13% in the form of a 6,000 euro "environmental premium." This offer is exclusive to a particular model, which must be delivered by June 30, 2024. This is the largest price reduction this year. The deal is already advertised on Tesla's official website. In its most affordable configuration, the Model Y is now priced at less than 39,000 euros. As per records from the Federal Motor Transport Authority, only 81,300 Model Ys were registered in Germany up to April 1.
Tesla has also recently announced that they'll be stopping production at their plant in Grünheide, near Berlin, for five days in June. The production will come to a halt on the 14th, 17th, 27th, and 28th of June. A company spokesperson claimed that these breaks are necessary for improving the efficiency of the production facilities and optimizing the availability and cycle times. Ironically, Tesla had earlier suspended their manufacturing operations at this same plant due to attacks on ships in the Red Sea by the Yemeni Huthis in January, which had lasted for roughly two weeks. In March, there was an attack on the power supply near the factory, causing a near halt in production for a week. A month later, environmental activists attempted to storm the plant during protest days after Ascension Day, forcing the police to intervene. This resulted in a single day with no cars being produced.
Tesla has been producing electric cars at its plant in Grunheide for over two years now, with a workforce of about 12,000 employees. Recently, the company announced that they'll be cutting 400 jobs in Grunheide. Despite this, Tesla still plans to enhance production in the future. They expect to produce two million cars annually at the Brandenburg-based plant. Their current goal of one million cars has yet to be reached.
The Handelsblatt report adds that Tesla remains unsure about what to do with its unsold cars, with "thousands" of them parked in one location, an old military site 70 kilometers east of Berlin.
Meanwhile, Elon Musk, Tesla's CEO, declared via X that the Model Y would no longer receive updates this year. Tesla still strives to improve their vehicles consistently, aiming to make six-month-old cars slightly better. High interest rates, which have lessened consumers' desire for significant purchases, have reduced the company's efforts to update the older models. As a result, Tesla's global vehicle deliveries experienced a decline for the first time in almost four years in the first quarter. While Tesla leads the electric car revolution, Chinese competitors are offering cheaper models, targeting the world's largest car market.
Sources: Handelsblatt, Tesla website
Read also:
- Amidst the car industry's economic challenges, other US-American car manufacturers like General Motors and Ford are also experiencing job cuts due to the shifting focus towards electric vehicles.
- Tesla Motors, in an attempt to remain competitive in the European market, is not only reducing the price of Model Y electric cars but also investing in a new green factory in Brandenburg, aiming to create thousands of new jobs and contribute to Germany's transition towards sustainable mobility.
- The global car manufacturing industry is undergoing significant changes, with Tesla Motors leading the way in electric vehicle production, while traditional car manufacturers like Volkswagen and BMW are struggling to adapt to the new technology and the increased demand for green vehicles.
- The car industry is facing a major shift as governments around the world phase out subsidies for internal combustion engine cars and introduce tax incentives for electric vehicles, putting pressure on companies like BMW and Mercedes to innovate and invest in green technology to remain competitive in the future.
