about 1 month ago • 2 mins
What’s going on here?
Tesla trimmed the price of two electric vehicle (EV) models, so now Europeans can risk an automated accident for less.
What does this mean?
The fuzzy feeling that comes with saving the world isn’t cheap. EVs often cost more than traditional fume-throwers, especially now government incentives that made them cheaper have largely wrapped up. It follows, then, that 3.8% fewer new EVs were registered in Europe this December than last. So you can’t blame Tesla for trying to buck the trend: the world’s second-biggest EV maker – recently overtaken by Chinese BYD – made two Model Y versions some €5,000 ($5,400) cheaper in the region. That made Tesla stand out against the competition, pushing down shares of rivals Volkswagen, Stellantis, Renault, and BMW. But slipping sales will have knees shaking all along the supply chain, too, with companies like battery suppliers and makers seeing their prospects shrink.
Why should I care?
For markets: Enjoy the January sales.
Tesla reduced prices over and over in China last year, prompting rivals BYD, NIO, Li Auto, and Xpeng to do the same. After all, in such a crowded and competitive market, any shrewd move from a competitor could compromise a company’s bottom line – especially because EVs aren’t the sort of thing you buy a few of. So if you’re a European in the market for an electric hot rod, you might bag a sale by holding out a little bit longer.
The bigger picture: Cover your mouth.
China’s yawns could be contagious this year. The Magnificent Seven – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla – lent investors their magic touch over the last few years, partly thanks to China making up 19% of Apple’s revenue and 22% of Tesla’s earnings in the first nine months of the year. But with the Chinese economy stumbling and population slipping, companies that once relied on the market may need to find a replacement, stat.
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