Tesla recently announced that all variants of their popular Model Y and Model 3 vehicles now qualify for the maximum €6,750 subsidy in Germany. This is a significant change as previously, Tesla’s vehicles did not qualify for many incentive programs across various markets. This new development is a clear indication that Tesla is rethinking its pricing strategy in areas across the globe, not only benefiting customers with notable reductions, but also making models and variants newly eligible for incentives.
The decision to adjust the qualification criteria for these subsidies was made by German lawmakers, who believed that Tesla’s vehicles were priced too high to be eligible for the subsidy. The revamped EV tax credit in the US has a $55,000 limit for EVs that it doesn’t classify as SUVs, which made most Model Y variants ineligible until Tesla moved forward with significant price cuts. This situation is not new and has played out in the past and in other locations.
However, with Tesla’s recent price cuts in Germany, all variants of the Model Y are now eligible for the subsidy for the first time. The Model 3 has previously qualified for the subsidy but it was not able to qualify for a while due to the high pricing strategy. This new development is a clear indication that Tesla is rethinking its pricing strategy and making sure that its vehicles are accessible to a wider range of customers.
Tesla’s recent decision to qualify all trims of the Model 3 and Model Y for the full incentive in Germany for 2023 is a significant move that is sure to make the company’s vehicles more accessible to a wider range of customers. In partnership with the Federal Office for Economic Affairs and Export Control (BAFA) in Germany, Tesla has officially confirmed that all models of the Model 3 and Model Y now qualify for the maximum €6,750 subsidy. This means that customers in Germany can now purchase a Tesla vehicle for just over €40,000 when the subsidy is combined with the reduced prices.
This development raises questions about Tesla’s pricing strategy in other areas across the globe, particularly in the US. Will the company strive to keep prices within the constraints of various incentives and tax credits in other markets as well? Currently, all variants and model upgrades of the Model 3 and Model Y are eligible for the subsidy in Germany, which gives the company some room for manoeuvre.