Germany has stopped helping electric cars. Immediately after this, all brands reduced their prices by thousands of euros.

Germany is the country in Europe that buys the most electric vehicles. Their plans already included the phasing out of assistance for the purchase of vehicles of this type, which was to be consolidated this year, with a final end to deliveries in 2025.

But due to purely political instruments, the German government was forced to stop aid overnight in the last days of 2023. The buyers watched it disappear from their hands until 6750 euro assistance if they decide to buy a vehicle of this type that costs no more than 40,000 euros.

Consequently, manufacturers have rushed to confirm that they will keep the prices of their vehicles lower through lucrative discounts. Kia, Stellantis, Mercedes, Audi and Volkswagen were among the manufacturers that announced they would retain their own purchase assistance.

All this ended with the sale of the Dacia Spring for 12,750 euros. Volkswagen ID.4 with a small 54 kWh battery (which is not sold in our country) for 32,600 euros. And Tesla is getting rid of units in stock at a price of just over 40,000 euros.

Goodbye, help. Welcome price war

The year 2024 has arrived for Tesla, mired in bipolarity. On the one hand, what we have been waiting for for so long has been confirmed: the Tesla Model Y has become the best-selling car in Europe, including cars with an internal combustion engine. On the other hand, the company will have to stop operations at its Berlin plant due to attacks on shipping companies in the Red Sea.

And finally, there are things that have also changed in 2024. Among them is Tesla’s intention to try apply for participation in the competition. To do this, he is using the same weapon he has used so far: lowering the prices of his electric cars.

In Spain, the Tesla Model Y received a generous discount that brings it closer to 40,000 euros in the affordable version and, in addition, again places it below the Volkswagen ID.4, which the Germans had previously reduced with the intention of lowering the price. place it lower than Elon Musk’s. The movement lasted barely one day.

But it is in Germany that Tesla is making the most effort. Realizing the impact the withdrawal of aid would have on competitors, the American company launched a sharp offensive.

An American company has reduced the price of Tesla Model Y by 8000 euros in Germany and he sells it for 42,990 euros. This is the same price as in Spain, with the only difference being that for a German this price is much more attractive and affordable than for a Spanish buyer.

But in addition, Tesla not only reduced the prices of its cars in Germany, but also did so with financing… down to 0%. That is, someone who buys a Tesla Model Y in Germany will pay 42,990 euros. In Spain, where financing is 4.06% per annum, the same car financed for five years and paying €10,000 up front would mean a final cost to the buyer of €47,905.

Tesla tightens financing

We’ve been talking for some time about Tesla’s ability to continue to edge out competitors with aggressive discounts on its electric vehicles. Their repetition caused parts of the industry to demonstrate their dissatisfaction with the company. In fact, this is one of the reasons Hertz sells its cars.

From different angles, we’re getting news about how Tesla can take advantage of the huge profitability that the company has been reaping the benefits of its cars lately so that it can now tighten its belt and continue to lead the sales of electric vehicles.

The strategy leverages Tesla’s ability to produce cars in the cheapest way possible, with a vehicle that will remain aesthetically untouched for a long time, as well as its software and brand image advantage to provide added value that the customer is willing to pay for. to pay.

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For all these reasons, Tesla has demonstrated tremendous ability to unseat its competitors. While the competition is moving in a much narrower field, Tesla doesn’t just want to attract a potential customer with price. He also wants to do this with funding.

Actually, Spanish financing Tesla Model Y at 4.06% per annum is already a good indicator, and Tesla has been experimenting with this instrument in Spain since last year. Many brands are dangerously close to 10% APR financing rates.

Without going into too much detail, Volkswagen’s ID.4 is priced at 9.14% financing if the car is financed for six years. In fact, if it is financed for a period of more than three years, the cost of financing reaches 10.39% of the loan amount, which is more than 5,000 euros in interest. But if financed over six years, the interest skyrockets to €9,655. The hidden cost Tesla wants to play with.

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Photo | Bram Van Ost

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