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Tesla cuts Model Y price as Covid-19 depletes demand from car buyers

Image credit: tesla

Tesla has slashed the cost of its Model Y SUV by $3,000 (£2,380) as the economic downturn caused by the Covid-19 pandemic depletes demand from car buyers globally.

The Model Y now comes in at $49,990 following similar price cuts to other vehicles in Tesla’s range in May.

The vehicle is not expected to start shipping in the UK until 2022 based on previous rollouts, but it is already getting hot competition in the form of Nissan’s all-electric SUV, the Ariya, which is expected to be launched later this week.

Despite doom and gloom for the global car industry, Tesla, which is founded by entrepreneur Elon Musk, posted a smaller-than-expected fall in car deliveries in the second quarter.

It subsequently became the most valuable car company in the world reaching a $208bn valuation and overtaking rival Toyota.

With deliveries of the Model Y beginning in March, Tesla said the car had already become profitable in April, marking the first time such a milestone had been achieved in the first quarter of release for one of its vehicles.

Other automakers offering financial incentives to consumers as a way to maintain demand during the economic crisis include Ford, GM and Fiat Chrysler who are offering 0 per cent financing rates or longer-term payment options.

The UK’s car manufacturing sector, already suffering from the trade impacts brought about by Brexit, saw a 41.8 per cent fall in sales in March and an estimated £8bn fall in revenue.

The Society of Motor Manufacturers and Traders said that one in six jobs in the sector are at risk of redundancy without help from the government.

In May, the French government announced an €8bn (£7.1bn) funding package for its domestic car industry as production plunged by 90 per cent.

Musk has been unsupportive of stay-at-home restrictions caused by Covid-19, which resulted in the closure of its Fremont, California factory in late March.

He described the restrictions as “fascist” and said they undermined American freedoms and democracy.

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