BERLIN: Tesla said today that the electric vehicle maker, which cut prices of its Model Y and Model 3 vehicles in the US and Europe overnight, was able to provide its cars at a more accessible price because cost inflation was normalising.

"At the end of a turbulent year with interruptions to the supply chain, we have achieved a partial normalisation of cost inflation, which gives us the confidence to pass this relief onto our customers," a spokesman for Tesla Germany said in a statement.

The lower pricing across Tesla's major markets marks a reversal from the strategy the automaker had pursued through much of 2021 and 2022 when orders for new vehicles exceeded supply.

Tesla CEO Elon Musk acknowledged last year that prices had become "embarrassingly high" and could hurt demand.

The US price cuts, announced late Thursday on the Model 3 sedan and Model Y crossover SUV, ranged between 6% and 20% compared with prices before the discount, according to Reuters calculations.



That is before an up to US$7,500 federal tax credit that took effect for many electric vehicle models at the start of January.

Tesla also cut prices for its Model X luxury crossover SUV and Model S sedan in the United States.

In Germany, it cut prices on the Model 3 and the Model Y - its global top-sellers - by between about 1% and almost 17% depending on the configuration. It also cut prices in Austria, Switzerland and France.

Still, some users on Tesla fan forums online complained the price cuts disadvantaged customers who had recently bought their vehicle, leaving them with a lower-valued item on the second-hand car market.

"I'm not very pleased with these huge price sways. Just reducing 10,000 euros like that - definitely makes you feel that you just paid far too much," one user wrote on a 'Tesla Drivers and Friends' forum today.

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