Elon Musk recently made an announcement that Tesla would be reducing the prices of the Model Y by $1,000 until the end of the month. The price cut was explained by Musk as a response to lower demand for electric vehicles during the winter months. This is not the first time Tesla has lowered prices in the past year due to decreased demand.
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 starting at $42,990 and $47,990, down from their original price. 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 from competition from other electric vehicle manufacturers, particularly from Chinese automaker BYD which recently overtook Tesla as the world’s top seller of electric vehicles. Additionally, Tesla is also preparing to ramp up production of a more affordable mass-market electric vehicle code-named “Redwood,” after Elon Musk warned investors of a potential sales slowdown. With a push to make its cars cheaper and facing competitive threats, 2022 is a pivotal year for the automaker.