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Friday, 29 May 2020 20:02

Tesla and Other EVs are Becoming More Attractive to Buyers Despite Pandemic

Written by Joey Klender, Teslarati

Tesla’s recent price reduction of three of its vehicles will likely encourage consumers to consider an electric car for their next automotive purchase.

But the electric automaker is not the only company offering reduced prices on all-electric models during the pandemic, which makes the current time a favorable opportunity to purchase a new battery-electric or hybrid vehicle, pandemic notwithstanding.

 

On May 27, Tesla slashed the prices of the Model 3 by $2,000, and the Model S and Model X Long Range variants by $5,000. A study from Consumer Reports said incentives and general price reductions battery-powered vehicles is helping buyers save big, and the pandemic is undoubtedly a driving factor.

 

“The underlying reality is that there has been a dramatic slowdown in car sales since the pandemic swept the nation, causing an oversupply for many models and an eagerness to sell from manufacturers and dealerships alike. There are price reductions and great deals to be had, whether they are announced or not,” said Gabriel Shenhar, associate director of the auto test program at Consumer Reports.

 

While luxury-branded models are currently selling at a 10% to 16% discount according to data from TrueCar, many hybrids and EVs are selling between 5% to 9% less than their MSRP. Data suggests that some hybrid or EV models from veteran carmakers could offer as much as a 24% discount based on available incentives.

 

In times of low sales, franchised dealers can use incentives, promotions and price adjustments to try and encourage buyers to purchase a car. Even though the automotive market continues to struggle as unemployment rates skyrocket, dealers are giving buyers tasty pricing on sustainable vehicles.

 

But what do the discounts mean for Tesla?

 

Tesla operates with a direct-to-consumer sales model, cutting out the middle man of a dealership and sending cars straight to the customers who order them. This strategy is advantageous for the automaker, as it gives the company full control over the pricing of its vehicles and how price adjustments can be used to encourage sales.

 

Ultimately, Tesla can encourage more sales on its own using strategies that are specifically designed for its vehicles. This is evident in the company’s decisions with its cars’ pricing and features, as well as the rollout and retirement of variants such as the Mid Range RWD Model 3.

 

That being said, Consumer Reports notes today, customers have the upper-hand on automakers because of slumping sales figures.

 

“Remember, it’s a buyer’s market now, so the consumer is in the driver’s seat,” said Shenhar.

 

We thank Teslarati for reprint permission. 

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