Tesla, led by Elon Musk, recently announced that it would be reducing the prices of the Model Y by $1,000 until the end of the month. The price cut was offered because people tend to be less inclined to buy cars during the winter months. This is not the first time Tesla has reduced prices in the past year due to lower demand for electric vehicles.
The discounted prices will only be available for the rear-wheel drive and long-range versions of the Model Y in the US, with prices set at $42,990 and $47,990 respectively. However, this is only a temporary discount as prices are set to go back up on March 1.
The Model Y is Tesla’s most popular model and accounted for a third of all electric vehicle sales in the US last year. But, Tesla is facing challenges as it faces competition from other electric vehicle manufacturers, particularly from Chinese automaker BYD which recently overtook Tesla as the world’s top seller of electric vehicles.
To address these challenges and prepare for potential slowdown in sales, Tesla is ramping up production of a more affordable mass-market electric vehicle code-named “Redwood.” This comes after Elon Musk warned investors about a potential sales slowdown and informed Tesla workers that they can expect a difficult version of their well-known “production hell.” With a push to make its cars cheaper and facing competitive threats, 2022 is a pivotal year for the automaker.