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Tesla Does Enormous Price Cut On Model Y In Europe For Nearly $5,500 - Is a Demand Lever or Project Juniper the Cause?

Tesla slashed prices in Europe for the Model Y recently, by almost $5,500. Did Tesla do this because of demand, or because of upcoming changes to the Model Y for Project Juniper?
Tesla Does Enormous Price Cut On Model Y In Europe For Nearly $5,500 - Is a Demand Lever or Project Juniper the Cause?

Tesla Reduces Model Y Prices in Europe

Tesla has reduced the price in Europe for the Model Y - by an enormous amount. Here are the price cuts:

In Dollars

* Model Y Standard Range: Reduced by $2,070 to a price of $46,542
* Model Y Long Range: Reduced by $5,449 to a price of $54,378.28
* Model Y Performance: Reduced by $5,449 to a price of $61,015

In Euros

* Model Y Standard Range: Reduced by 1,900 to a price of 42,900
* Model Y Long Range: Reduced by 5,000 to a price of 49,900
* Model Y Performance: Reduced by 5,000 to a price of 55,990

These are not small price cuts - they are huge and as such, many are wondering if Tesla is having a demand issue. The percentages on these cuts range from 4.2% to about 9.1% from the standard range to the long and performance Model Y vehicles.

Are these price cuts coming to the U.S.? I think if interest rate go up, they will indeed come to the U.S. However, I don't see interest rates going up - at least, there's less of a chance of that than interest rates going down. Most people expect interest rates to go down over the next year or so.

If you think these prices cuts are enormous, just wait to see what the price of Tesla vehicles are further into the future - they are going to be absurdly cheap.

My Take

Elon Musk has said that everyone wants a Tesla, but not everyone can afford one. Elon also has an end goal of flooding the streets with autonomous vehicles that drive themselves and others - calling a self-driving car one of the most valuable things ever done in the history of civilization.

Therefore, he is going to cut prices as much as possible to make sure Tesla continues to grow sales volumes each year. Many argue that Tesla should instead be advertising instead of cutting prices, however, nobody has given a clear indicator of what that ad campaign should look like.

Gary Black, on X, says the following about Tesla and advertising:

Educating non-EV users why they should go EV (lower costs, charging convenience, OTA technology updates, superior performance, good for environment) will also accelerate EV adoption. IMHO TSLA should focus on its long term mission of accelerating EV adoption and spend less time managing short term order flow.

I agree that EV education is necessary, but where should Tesla advertise - on X, YouTube, Facebook, Instagram, TV, the Super Bowl, magazines, radio, billboards, or where else? And how much on each of these should Tesla spend?

I've seen a lot of encouragement for Tesla to advertise, but nobody has recommended what kind of ad Tesla do or where Tesla should do that advertising.

I very much agree with Gary that Tesla needs its $25,000 compact car out as soon as possible. This creates a market that far exceeds the Model 3 and Model Y combined in the world.

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Price Cuts Are Better In the Long Term

Price cuts may affect margins in the short term by reducing short term profits for Tesla. However, they are better for the long term. Tesla's ultimate goal is to flood the world with robotaxis and autonomous vehicles. This is how Tesla gets to a market cap bigger than Apple and Aramco combined.

Tesla will get there faster if it lowers prices and sells more vehicles to the masses. If Tesla spends money on advertising and even figures out the exact right way to advertise and raises or keeps prices the same, but does not sell as many EVs, the mission of Tesla is slower.

Now, if Tesla can find a way to advertise and sell more EVs than by lowering prices, I think Tesla should very much advertise instead of lowering prices - or even better yet, lower prices and advertise effectively and sell even MORE EVs.

Customers in Europe, particularly Germany, are going to benefit from these price cuts. The Model Y is still not cheap in Europe, however, costing just over $46,000 for the standard range and just over $54,000 for the long range Model Y.

Tesla likely isn't going to be done cutting prices until interest rates start coming down. I'd expect to see more price decreases in the next few months - and longer if interest rates remain high.

Project Juniper

Tesla has released their new Model 3, Highland, in North America now, and this is Tesla's latest update - which changes and adds over 50 features.

Tesla is most likely going to update the Model Y this year, code named Project Juniper, and this may also be another reason Tesla is lowering prices, so it can make sure that inventory is as small as possible.

In Other Tesla News: Endless Stream of Tesla's Continuously Going Through Boring Tunnel Loop at Las Vegas

Is Tesla cutting prices a good thing for Tesla - or is it harming the company?

Share this article with friends and family and on social media - or leave a comment below. You can view my most recent articles here for further reading. I am also on X/Twitter where I post more than just articles daily, as well as LinkedIn! Thank you so much for your support!

Hi! I'm Jeremy Noel Johnson, and I am a Tesla investor and supporter and own a 2022 Model 3 RWD EV and I don't have range anxiety :). I enjoy bringing you breaking Tesla news as well as anything about Tesla or other EV companies I can find, like Aptera. Other interests of mine are AI, Tesla Energy and the Tesla Bot! You can follow me on X.COM or LinkedIn to stay in touch and follow my Tesla and EV news coverage.

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Article Reference: Gary Black On X | Investors

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