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Tesla’s Price Cut Sparks Competition Among European Carmakers

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European carmakers experience stock decline as Tesla reduces prices in Germany

Shares in European carmakers took a hit on Wednesday following Tesla’s decision to lower prices in Germany, signaling intensified competition among electric-car manufacturers in the region.

At 10:58 GMT, the shares of Volkswagen dropped by 2.5%, Stellantis by 1.6%, Renault by 3.3%, Mercedes-Benz by 1.8%, and BMW by 2.6%.

Tesla slashes prices in Germany

According to Tesla’s website, the U.S. electric-car company reduced prices by 5,000 euros ($5,439.25) for two versions of its Model Y. German consumers can now purchase the Performance model for EUR55,990 and the Long Range model for EUR49,990. Additionally, the base Model Y price was lowered by EUR1,900 to EUR42,990.

Electric-vehicle pricing faces challenges in Europe

HSBC analysts noted in a recent report that intensified competition and weakening demand are likely to exert pressure on electric-vehicle pricing in Europe this year.

Ripple effects: Tesla’s price cut impacts Asian carmaker stocks

Tesla’s price reduction strategy extended beyond Europe. The company recently slashed prices in China, causing a negative ripple effect on Asian carmaker stocks this week.

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