Tesla has slashed the prices of its Model Y across Europe this morning, after it reduced prices of its Model 3 and Model Y prices in China to undercut BYD, according to CNBC.

In Germany, Tesla reduced the price of its Model Y Long Range by €5,000 to €49,990 ($54,340), a discount of 9%. It also cut the price of its Model Y Performance by €5,000 to €55,990, an 8% discount. The automaker joined Volkswagen and BYD in reducing prices after the government ended EV incentives, according to Automotive News Europe. But compared to BYD’s drastic 15% cuts, Tesla is taking a more measured approach.

German drivers can also get the Model Y for €42,990 – €1,900 less than the previous price.

The Model Y was Germany’s top-selling BEV in 2023, with some 45,800 new car registrations. However, Tesla lost its No. 1 position as the country’s best-selling BEV brand to Volkswagen. VW reports BEV sales of 70,628 units last year, a 12% increase, compared to Tesla’s 63,685, a 9% drop.

In France, Tesla Model Y prices were cut by up to 6.7%, up to 7.7% in the Netherlands, and up to 7.1% in Norway, CNBC reports.

Electrek reported last week that BYD is dropping prices of its EVs in Germany by as much as 15%, with its Atto 3 compact SUV seeing the biggest cuts. BYD only sold 4,140 cars in Germany in 2023, but is looking for 10% market share after its factory in Hungary starts production in a few years.

VW has also been slashing prices on the ID line in France, Belgium, Germany, and Norway, among other countries. While VW beat Tesla in Germany, it trailed by a long shot in EV sales in France. In 2023, VW sold 4,791 ID3s, making it only the 84th most popular model overall and 13th best-selling EV, Automotive News Europe reports. In France, the Tesla Model Y, the best-selling EV, sold 37,124 units.

In Norway, VW has made more critical cuts to the ID3’s price tag, to stay competitive in a market that has achieved 82% percent of sales being EVs – 20% of those sales being a Tesla in 2023. Belgium and Sweden will also see revised vehicles and lower prices. In Belgium, the ID3 is now priced at €39,990 and the ID4 for €39,649, both now eligible for an EV bonus of €5,000.

Meanwhile, Tesla is stopping production of most of its EV production at Giga Berlin, which builds the Model Y for European markets, from January 29 to February 11 due to battery deliveries from China being delayed due to the Red Sea shipping crisis. Volvo, too, has rerouted its shipping and announced delays at its factory in Ghent, Belgium.

Electrek’s Take

Europe has been rolling back on its EV incentives, with Germany ending its EV subsidy program in December after paying out €10 billion since 2016. A tighter new budget pushed the decision to drop it early, which was a bit of a surprise since subsidies were originally intended to run through the end of this year. Automakers VW, Stellantis, Mercedes, and Audi have said that they will absorb some or all of the costs of EV incentives, but it’s obviously not a long-term solution. Norway has nearly dropped its EV incentives, and France has also radically changed its EV incentives to exclude vehicles made in China, squeezing out the Tesla Model 3. And BYD is looking to make some serious moves in Europe, and now that it will be building EVs in Hungary in the next couple of years. So we’re likely to see more of these price shifts and cuts as the industry settles into a new normal, post-subsidies. Meanwhile, Tesla shares were down 1.6% in U.S. premarket trading, according to CNBC.