Germany has slid into recession. Although the country is still held hostage by completely abstruse discussions about speed limits, nuclear power plant phase-outs and mandatory heat pumps, the economic policy of the green “light figure” Habeck is sinking further and further into the dark. There are already counterproductive rumblings about tax increases. The buying mood of the population has consequently sunk even further. The displeasure about the “traffic light policy” has now reached most of society.
Pragmatists rare but on the winning side
German and European OEMs downright mocked Tesla’s price reductions earlier this year. It was believed that the Americans wanted to compensate for the (actually existing) overproduction. Further effects of the aggressive pricing policy are now becoming visible. And they are not good for competition, and in some cases, for some consumers.
Industry insiders fear upheaval
DAT, Deutsche Automobil Treuhand, is keeping a close eye on the German market, including the used car market. Their assessments regarding Tesla’s pricing policy should therefore be taken very seriously.
Competition remains under pressure
Tesla has now “pushed down” into price regions that were the domain of European OEMs with far less well-equipped smaller vehicles with lower efficiency and battery capacity. The smallest Tesla model now costs around 36,000 euros after subsidies, poaching Opel, PEUGEOT, VW & co. with higher efficiency and a flanged charging infrastructure that remains without precedent.
Margins? What margins?
German and also French OEMs currently make little, if any, profit per electric vehicle. As a rule, they even make losses, which they compensate with the production of combustion vehicles. The financial scope is therefore exhausted – they cannot keep up with the price reductions with the current models. Some try to counter with slimmed-down models, but this tends to worsen the situation.
The premium manufacturers are fleeing to the front
On the other hand, premium manufacturers such as Mercedes-Benz and BMW are daring to flee forward and are introducing more new models at high entry-level prices. The electric BMW Five, which the Munich-based company says is the most popular business sedan in Germany as a combustion engine, has just celebrated its world premiere. Entry-level prices start (in basic equipment) at 70,000 euros for the “small” version. And the list of extras for the car, which is over 5 meters long, is long, as is usual with German manufacturers.
Used market in free fall
Hard effects also on the used market. This time even Tesla drivers have to give feathers because the previously used prices can no longer be realized due to the price reductions of the new cars and the large supply. The holding period will therefore increase. However, used cars from competitors face an even greater loss because they are usually not as well equipped as the Teslas, which are always sold fully equipped.
A bulwark against China?
And then there’s China. Chinese automakers and startups are pushing into European markets and would love to take over the lucrative German market today. Tesla’s aggressive pricing and delivery policy has, DAT expects, stopped this for the time being. The Chinese newcomers are also increasingly “going under the bus.”
Everything done right?
In other words, the Musk company seems to have done everything right. What’s more, it can deliver, which it also has over the classic OEMs. The consequence? Since the beginning of the year, the Tesla Model Y has not only been the most successful electric car in Europe but is also set to become the most successful car worldwide. Wow.
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