Tesla offering discounts of over $1,300 on some US Model 3 cars

SAN FRANCISCO: Tesla is offering discounts of more than $1,300 on some Model 3 cars in its US inventory following even heavier discounts in Europe, according to a Reuters’ review of its website, even as the electric carmaker has raised US prices on most newly ordered cars this month.

Facing economic headwinds and mounting competition, Tesla this year has aggressively cut vehicle prices in several regions and is resorting to the traditional automakers’ tactic of offering incentives to clear inventory, analysts said.

On Tuesday, CEO Elon Musk told shareholders Tesla will try advertising for the first time, a move analysts said could drum up demand. Musk warned Tesla was not immune to the global economy, predicting it will be difficult for the next 12 months.

Tesla slightly raised prices of some new models twice this month in the US, although prices remain much lower than they were before the price cuts began this year.

Tesla now offers discounts of more than $1,300 on some Model 3 cars, up from the $250 discounts earlier this month on some Model Y and Model 3 vehicles, according to the website. As of Friday, the $250 discount was no longer offered on Model Y.

US prices for Model 3 start at $40,240 and Model Y at $47,490.

“Tesla is beginning to rely on incentives in the same manner traditional automakers have when their dealer inventories begin to spend too much time on the lot,” said Edmunds.com director of Insight Ivan Drury, adding the incentives “signal that Tesla has begun to slightly oversupply the market.”