Tesla Slashes 7,000 Euros Off Model S Price in Germany And Throughout Regions Of Europe

9 months ago by Eric Loveday 59

Model S Pricing in Germany

Model S Pricing in Germany

It was bound to happen eventually, right?

Tesla Model S in Europe

Tesla Model S in Europe

With automakers constantly cutting a couple grand off prices for electric vehicles, we knew Tesla would eventually follow suit.

The price slashing has begun.

But not here in the US.

Tesla Motors has slashed the Model S price over in Germany (and many other European countries) by a rather substantial amount recently.  When the Model S first launched in Germany in late 2013, its base MSRP was 72,000 euros.

Now, buyers can get a Model S from 65,300 euros in Germany. In other locations in Europe generally by not quite as much.  In the Netherlands for example, the price has dropped recently to €66,200 – about a €4,000 cut.

It’s believed that weak demand for the Model S in Germany (and Europe) led Tesla to reduce prices across the board; nothing wrong with reducing the price to sell more EVs – that is what is happening with everyone else in the market.   But officially the main reason given for the change regionally is the appreciation of the currency against the US dollar - as Tesla states they have a policy of “fairing pricing in all international markets.” 

It seems like a logical and decent way to price the Model S, however if trends reverse with sales lagging expectations, we imagine it would be very difficult for the auto maker to put prices back up – as the car market is just not accustomed to such a thing.

For example, Model S pricing was announced in Canada in August of 2012 for $75,200 CAD, today it stands at $77,800 (about equal to the price increases in the US).   Since practically the moment it was announced, the US dollar has appreciated significantly against its Canadian counterpart - up some 12%+ since then.  We don’t expect to see Tesla increasing the price in that country by $9,000 to cover the swaps anytime soon.

Editor’s Note:  When Tesla announced European pricing on December 19, 2012 the Euro traded at 1.321, yesterday it closed at 1.386, up about 5% since the announcement.

So far this year only 95 Model S EVs were registered in Germany through the first 2 months, despite the fact that Tesla CEO Elon Musk believes that Germany is one of the key markets for the Model S.

Tesla has a way of quietly reducing prices in various countries. The automaker never makes an official announcement regarding price reductions, so when/if Model S prices drop in the US, don’t expect to be alerted of it by Tesla.  We’ll bring that vital info to you when/if the price drop occurs though,  and we believe it’s going to happen soon.

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59 responses to "Tesla Slashes 7,000 Euros Off Model S Price in Germany And Throughout Regions Of Europe"

  1. Anon says:

    Hmm… Wonder what this will do to their stock value.

    1. Ocean Railroader says:

      I think it will help them from losing their shorts in that there are a lot of articles running around on the internet that Tesla has tapped out their existing sales market in California. Also there are far more people you can sell a model S to in a 65,000 euro market then a $75,000 euro market. Over all I think this is a good thing for Tesla’s future to cut prices into reality.

      I think if Tesla cut prices in the US and Canada by $8000 dollars on the lowest level of model S it would get BMW scared as a fish in a Susi place.

      1. JP says:

        Apparently there was some pricing discrepancy where a German could buy a Model S in Norway for about 7K less than buying it in Germany. This is no longer the case after the pricing change.

      2. sean says:

        While there is supression of the European model s price reduction in the North American media for obvious reasons (namely: lack of sales volume); I would suggest Mr. Musk consider purchasing a large block of TSL stock at the current frothy price (@ 140/) in order to quell investor concerns.

  2. MartinWelzl says:

    Thanks for reporting.
    Actually i got an official E-Mail by Tesla in Switzerland saying that the prices got reduced by up to 15% and also the reasons for the reduction.

    1. abhishekifmr says:

      Can you please post the reasons of price drop. 15% can’t be due to exchange rates alone.

      1. MartinWelzl says:

        Heres the e-mail i got:

        “””

        Angepasste Preisstruktur für das Model S in der Schweiz

        Wegen der Aufwertung des Schweizer Franken gegenüber dem Dollar im Verlauf der zurückliegenden Monate senkt Tesla den Preis des Model S in Schweizer Franken, um ihn dem aktuellen Wechselkurs anzupassen. Damit folgen wir unserer Geschäftspolitik fairer Preise in allen internationalen Märkten, derzufolge lediglich Transportkosten, Zölle und Steuern zu Preisunterschieden führen dürfen.

        Wir lösen zudem das Schweizer Servicepaket mit erweiterter Garantie auf und machen dieses dadurch optional. Wir bieten auch weiterhin vorausbezahlte, vier- und achtjährige Servicepakete zu günstigen Preisen an. Für unsere Kunden ist es wichtig zu wissen, dass es nach wie vor nicht notwendig ist ein Servicepaket zu kaufen oder regelmäßige Wartungstermine mit unserem Service einzuhalten, damit der Anspruch auf Teslas Garantie erhalten bleibt.

        Der Grundpreis für den Tesla Model S beträgt nun 71.900 CHF. Bitte kontaktieren Sie unser Verkaufsteam, um eine Probefahrt zu vereinbaren oder eine Bestellung zu tätigen.

        Mit freundlichen Grüßen,
        Tesla Motors

        “””

        1. DaveMart says:

          For those of us who are, like myself, innocent of all knowledge of German, Google translate gives this as:

          ‘Customized pricing structure for the Model S in Switzerland

          Because of the appreciation of the Swiss franc against the dollar over the past few months lowers the price of the Tesla Model S in Swiss francs, to adapt it to the current exchange rate. We follow our policy of fair prices in all international markets , according to which may only transport costs, tariffs and taxes lead to price differentials.

          We also solve the Swiss service package with an extended warranty and thereby make this optional. We also continue to pre-paid , four – and eight-year service packages at reasonable prices. For our customers, it is important to know that there is not still a need to buy a service package or to comply with regular maintenance appointments with our service so that the entitlement to Tesla’s warranty remains intact .

          The base price for the Tesla Model S is now 71,900 CHF . Please contact us to make our sales team to arrange a test drive or an order.

          Sincerely,
          Tesla Motors

          1. Aaron says:

            Ah, you beat me to it.

        2. Aaron says:

          Google-assisted translation:

          Customized pricing structure for the Model S in Switzerland

          Because of the appreciation of the Swiss franc against the dollar over the past few months, [we] lower[ed] the price of the Tesla Model S in Swiss francs, to [better match] it to the current exchange rate. We follow our policy of fair prices in all international markets, which may only [include] transport costs, tariffs and taxes, lead[ing] to price differentials.

          We also solve[d] the Swiss service package with an extended warranty, [making it] optional. We also continue to pre-paid , four- and eight-year service packages at reasonable prices. For our customers, it is important to know that there is not a need to buy a service package or to comply with regular maintenance appointments with our service so that the Tesla warranty remains intact.

          The base price for the Tesla Model S is now 71,900 CHF. Please contact our sales team to arrange a test drive or [place] an order.

          Sincerely,
          Tesla Motors

        3. kdawg says:

          For us English speakers:
          ————
          Customized pricing structure for the Model S in Switzerland

          Because of the appreciation of the Swiss franc against the dollar over the past few months lowers the price of the Tesla Model S in Swiss francs, to adapt it to the current exchange rate. We follow our policy of fair prices in all international markets , according to which may only transport costs, tariffs and taxes lead to price differentials.

          We also solve the Swiss service package with an extended warranty and thereby make this optional. We also continue to pre-paid , four – and eight-year service packages at reasonable prices. For our customers, it is important to know that there is not still a need to buy a service package or to comply with regular maintenance appointments with our service so that the entitlement to Tesla’s warranty remains intact .

          The base price for the Tesla Model S is now 71,900 CHF . Please contact us to make our sales team to arrange a test drive or an order.

          Sincerely,
          Tesla Motors

        4. Mint says:

          Is there an echo in here?

          1. TomArt says:

            IN HERE…In Here…in here…in…

  3. David Stone says:

    It is good for business that they are doing this.
    The price in the us is already quite acceptable, but in europe, with high taxes etc., it is crazy high.

    It is still more expensive than in the us, but no longer a third more.

  4. zoe-driver says:

    FYI, Tesla sold 66 Model S in February in Germany. Not much, but getting better.

    Price here includes 19% sales tax. Its getting interesting when we reach 59.950€ incl. tax. for the small Model S

    Regards

    1. Mint says:

      Tesla is production limited, so sales figures are really just about where Tesla chooses to deliver cars.

      They recently mentioned that Norway is a top priority, and it’s understandable for a variety of reasons.

      1. DaveMart says:

        Your evidence for the claim that it is production constraints, not demand which is limiting sales?

        If demand is high but production can’t cope, reducing prices is certainly a novel way of dealing with it, as it would increase not decrease the disparity.

        1. kdawg says:

          Would be nice if they published the waiting list info. What is the current wait time for a Model S?

        2. CherylG says:

          Good observation. We are constantly told that there is a supply problem, not a demand problem.

          Slashing prices does not address a supply problem, it addresses a demand problem.

          1. pjwood says:

            Tesla probably has penetration targets, where sales in Germany, for instance, are perhaps short. I still go back to their electricity costing almost as much as our gas.

            1. jeffhre says:

              Then again, their gas costs three times as much as ours…

              1. jeffhre says:

                Should have posted “two to three times as much.”

        3. Jouni Valkonen says:

          Tesla is not greedy company. This way it is similar to Google that polishing imago is far more important for Tesla than short term profits.

          This is called the fair pricing policy that Tesla does not take any excess, but is happy with 25–30 % gross margins.

        4. Mint says:

          I think they did it for image purposes, as they’ve constantly said that they will make the same profit worldwide, and only vary prices depending on fees/taxes/shipping.

          I’m sure some people were calling BS on this policy when looking at original German prices.

          65,740 EUR (new price) divided by 1.19 (VAT) multiplied by 1.39 (USD/EUR) = $77k. After accounting for shipping, that’s only a slight premium over the US price.

          1. DaveMart says:

            That’s a no then for any evidence that the Tesla is production, not demand, constrained? ;-)

            1. JP says:

              Since the wait time for a Model S is substantially longer than the actual build time that would mean Tesla is production constrained, not demand constrained.

        5. JakeY says:

          We’ve had plenty of articles saying Tesla is battery supply constrained right now and not expected to resolve until the second half of this year:
          http://insideevs.com/analysts-believe-tesla-wont-be-constrained-by-battery-cell-production/

          Sales for Q3 and Q4 2013 were at ~6900 per quarter, and production rate about 6600 last quarter (AKA production constrained). They are expecting to ramp to 7400 cars for Q1 2014, but guiding ~6400 cars delivered citing logistics of cars being in transit (for Europe I guess it means the Tilburg assembly plan will be limiting their delivery rate).
          http://www.greencarcongress.com/2014/02/20140220-tesla.html

          Logistics aside, if they still have a waiting list, then the car is still supply constrained. In the beginning of this year, waiting time is still 1-3 months in the US depending on which version you get.

          And Tesla had a similar price drop last year, when they were even more supply constrained, so it doesn’t seem price drop necessarily means low demand.
          http://www.ibtimes.com/tesla-motors-drops-price-model-s-europe-94000-1474712

  5. DaveMart says:

    Tesla’s claim that the price reduction is down to currency movements not weak demand is absurd.

    ‘Now, buyers can get a Model S from 65,300 euros in Germany. In other locations in Europe generally by not quite as much. In the Netherlands for example, the price has dropped to €66,200 – about a €4,000 cut.’

    Both Germany and the Netherlands use the Euro the last I heard.
    In fact since car imports from the US probably go into Rotterdam prior to despatch to Germany, costs to there are likely slightly less.

    1. alohart says:

      As you know, EU prices include the VAT of each country. My Google search indicates that the VAT in the Netherlands is 21% compared with 19% in Germany, so Model S prices in Netherlands would be higher than those in Germany.

      1. Suprise Cat says:

        The price differences in Europe also reflect cost of work time and small differences in warranty. Keep in mind, the sales price must cover all expected warranty repair work.
        Also Tesla pays more for the Superchargers electricity in Germany, than in Netherlands.

  6. DaveMart says:

    We will see if the March figures show a lift.
    If they don’t, then ‘Houston, we have a problem!’

    But of course, one would not expect any increase in European sales due to the price drop, as they are production constrained, not by demand! ;-)

    1. EVerwer says:

      MOD EDIT – Personal attacks are not allowed here – Consider this a warning

      Oh yeah tesla delivers 66 cars at german Feb

      means tesla sells 66 cars

      MOD EDIT – Again, no personal attacks

      tesla can produce their orders and deliver them in a month???

      these 66 cars are ordered several months ago

      MOD EDIT – Again, no personal attacks allowed

        1. EVerwer says:

          this crap still don’t understand

          MOD EDIT – No personal attacks

          these cars are ordered many months ago

          1. DaveMart says:

            Your logic appears at one with your coherence and linguistic abilities.
            However, have you any evidence that large numbers of people have now ordered their Tesla S cars and are desperately awaiting the production constrained delivery in Germany?
            If so, please provide links to this evidence.

            1. EVerwer says:

              wow this uK guy thought

              66 cars can be ordered and delivered in a same month

              MOD EDIT – Enough is enough with personal attacks

              1. Chris O says:

                @EVerwer: Davemart is in full troll mode these days. Don’t allow yourself to be overly provoked.

                1. DaveMart says:

                  A pretty disappointing comment, Chris, and also a personal attack.

                  Please take note, mods.

                  All I have said is that there is no evidence on the figures we have at the moment that Tesla is on course to hit their sales targets for Europe.

                  In what way is that trolling?

                2. DaveMart says:

                  Thinking about it Chris, I am rather annoyed at your unwarranted personal attack.
                  I discount the other chap, whoever he is.

                  You seem to imagine that anyone who disagrees with you, or presents facts you don’t much care for, is trolling, arrogant, or both.

                  Please either specify in what way the points I have made are trolling, as the sales data I have given are simply facts, or have the common manners to withdraw and apologise.

              2. Model S says:

                you guys really getting butt hurt? Lol

    2. Mint says:

      If the post below is correct (price drop happened 2 months ago), then you can see that it indeed had no effect on sales.

      The only evidence against that can come from Tesla’s quarterly results, namely if they show an inability to reach their 35,000 unit goal for 2014.

  7. Blind Guy says:

    Given the reason for the price adjustment, I think a retro-rebate should be considered by Tesla. In other words, this price adjustment really should have been in place from the start or at least from the beginning of the year. I think this would pay itself back in the future with the great PR that it would generate IMHO. Any other price cuts or promotions are a different matter and shouldn’t warrant any retro-rebates.

  8. Boris says:

    Come on people, US dollar is at 2.5 year low vs. the Euro. Obviously low demand in Europe doesn’t help, but Model S was priced with slightly higher margin here anyway, so now with strong Euro, there were 2 reasons to reprice the Model S, and that is what was done, now just let’s just hope for the best.

    1. Jay Cole says:

      From 2.5 years ago that is true.

      However, since pricing was announced 14 months or so ago, the Euro has only moved from 1.321 to 1.386…and closed as low as 1.3488 just a month ago. Give the volatility of the trade, the swing change is pretty marginal.

      1. Boris says:

        OK, point taken, but margins work out fine with current pricing, so Tesla will not be seeing a margin hit (when comparing to the US margins).

  9. justme from Germany says:

    Hi, the prices went down a long time ago – sometimes around christmas last year. So this is no big news here.

    1. TomArt says:

      The bulletin was sent by Pony Express.

  10. EarlyAdopter says:

    Prior to this change it was possible for someone in Germany to buy a Model S in Norway and have it shipped to Germany for 7000 Euros less. This change just equalizes prices across Europe.

    1. pjwood says:

      ^”fairness adjustment” would be consistent with simply repatriating money at the current exchange rate. If they had hedged, they’d be eating the loss.

      Jay, I wonder if the U.S. could see lower cost options as part of re-price. A number of them went from 1000, or 1500, to 2500.

      1. pjwood says:

        Post was meant in response to “currency hedging?” below

  11. TomArt says:

    Dropping prices can’t be a good sign…

    1. Model S says:

      the – sign is a great sign

  12. Ocean Railroader says:

    Tesla cutting prices could be a mix of low demand and falling batteries across the board. Such as if two years ago battery prices where 20% to 30% higher then in 2014. That alone would lift Tesla’s profit margin. But at the same time the battery prices are falling and lifting their profit margins demand for the car over all is not growing or reaching expectations. Then the logical thing would be to drop the price 10% to 15% to pass half the costs of falling battery prices to the consumer to make up for the small market the car is in. Over all this to me makes the most logical sense use savings from falling battery prices to grow the market for the car by opening up to new markets for the car.

  13. ffbj says:

    Well first we bankrupt Europe by selling them worthless mortgage cds. Then one of our premier car companies insults them with a commercial indicating lazy they are. Then we try and sell them expensive electric cars. They have no money, and they hate us. Tesla is basically saying, hey we are the good guys, we are are on your side, buy our cars.

  14. Thomas says:

    It is more like a 3,000 price drop according to their blog post from november 2013:

    “Der Einstiegspreis für das Model S in Deutschland liegt nun bei 68.000 Euro.”

    echo prevention:
    “The starting price for the Model S in Germany now stands at 68,000 euros.”

    http://www.teslamotors.com/de_DE/about/press/releases/tesla-pr%C3%A4sentiert-weitere-anpassungen-und-neue-optionen-f%C3%BCr-das-model-s

  15. Stuart22 says:

    I think cultural factors are at play – on balance Europeans are more provincial than Americans in their auto buying habits. I also wonder how effective Tesla is doing there using free publicity in place of commercial advertising to create demand.

    Could be that Musk is finding Europe a different ballgame requiring a different strategy. I wonder if and when Musk will cave in and pay $$ to spread the word about his cars.

  16. ModernMarvelFan says:

    And at the same time, if Tesla wants to sell more cars in China, they need to raise the price so the ultra rich needs to feel like they got something exclusive…

    That is how you sell anything in China. Make it more expensive and dumb rich people will flock to your store…

  17. Nix says:

    I wonder what they are doing for currency hedging. It seems to be working very well for them.