Tesla slashes Model 3 price in Europe by up to 9 per cent

Tesla has dropped the price of its Model 3 by up to 9% in Europe including Germany, France, Italy and the Netherlands.

The price of the Standard Range Plus (SR+) Model 3, which was €42,990 in Germany is now €39,990 ($A62,474), whereas the Long Range AWD is now €49,990 ($A78,097) instead of €52,490 and the Performance is €54,990 ($A85,908) instead of €58,490.

In France, price drops of up to €6,000 have been noted, while in the Netherlands price drops were somewhat smaller at €2,000 for the SR+ and LR model, and €1,600 for the Performance.

In Germany, the price drop means that once subsidies are applied, the SR+ costs just €33,990, or $A53,063 converted. The Long Range comes down to €43,990 ($A68,675 converted) and the Performance to €48,990 ($A76,481).

While Tesla’s Model 3 enjoyed several months at the top of the electric vehicle sales chart in many European countries after it was introduced in early 2019, other models are proving best-sellers, most notably the Volkswagen ID.3 electric hatch which topped Europe’s EV sales in December.

It is unlikely that Tesla is dropping the price to meet demand for the German electric hatch: the Model 3 sits instead in the premium sedan segment and costs some €10,000 less than the new Model 3 price.

Neither is the price drop necessarily to do with the fact that Tesla has started delivering the SR+ with a cheaper LFP battery from its Shanghai factory, as the price drop has been applied to other variants which currently come from Tesla’s Fremont factory.

What this means for Model 3 pricing in Australia is not entirely clear: while it was confirmed on Monday that the Shanghai-made Standard Range Plus will now be delivered locally, Tesla has also registered a Shanghai-made Long Range Model 3 with compliance authority RVCS.

Word is that Australian drivers who have Performance Model 3s on order have been advised that their orders will be delayed until Tesla begins making that variant in Shanghai later in 2021, also.

While Tesla sales staff have assured multiple Australian customers that a price drop would be applied to existing orders (this has also been reported by European drivers), the reason behind the European price drops may be more simple: the Euro is now worth some 10% more against the US dollar than it was this time in 2020.

And while the Australian dollar has also recovered since the pandemic first hit with a 9% increase against the US dollar to 78 cents today, Tesla already dropped the price of the Model 3 by 9% from $A73,990 back to $A66,990 in October. Whether another price decrease will be applied to the Shanghai-made Model 3 remains to be seen.