Tesla cuts prices in U.S., Europe to drive sales

STORY: Tesla has slashed prices in the U.S. and Europe in a bid to drive sales.

The U.S. price cuts were announced late Thursday (January 12), and covered all car models.

Reuters calculations showed a discount of up to 20%.

The discount could exceed 30% when you add in new federal tax credits, which took affect this month.

In Germany, Tesla cut prices on its Model 3 sedan and Model Y crossover.

Those are its best-selling vehicles worldwide.

The discounts ranged up to almost 17%.

Prices were also cut in Austria, Switzerland and France.

Such moves follow reductions announced earlier in China and other Asian markets.

The discounts come after Tesla missed Wall Street estimates for deliveries.

They also mark a sharp reversal from its former strategy, when demand was stronger and prices were trending higher.

Last month, company boss Elon Musk said that global interest rate rises had changed the outlook for the industry, and could require price cuts.

Analysts said the new moves should work to stimulate demand.

They could also spark a price war with European and Chinese rivals.

Volkswagen only recently raised the price of its entry-level ID.3 model, putting it roughly on par with Tesla’s Model 3.