Tesla recently announced that it would be cutting the prices of the Model Y by $1,000 until the end of the month. Elon Musk, the company’s CEO, stated that this price cut was being 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. The new prices are $42,990 and $47,990, down from their original price but do not include the “performance” version. However, this is only a temporary discount as prices are set to go back up on March 1st.
Despite being Tesla’s most popular model and accounting for a third of all electric vehicle sales in the US last year, the company is facing challenges in maintaining sales momentum 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 combat these challenges, Tesla is preparing to ramp up production of a more affordable mass-market electric vehicle code-named “Redwood.” With a push to make its cars cheaper and facing competitive threats, 2022 is a pivotal year for the automaker.