A price below 16,500 euros. This is the decrease registered in France by the Tesla Model 3, in less than three months (counting the obtaining of the ecological bonus, of 5000 euros). The Californian saloon is now at 41,999 euros. It’s a little cheaper, for example, than Renault’s Megane E-Tech. Since January, the Californian manufacturer has cut its prices twice in Europe, and this is beginning to seriously worry its competitors.
Tesla’s offensive is “a challenge”, acknowledged the general director of the Renault brand, on the occasion of the publication of its quarterly invoicing this Monday.
“It is a warning that we are watching closely,” Fabrice Cambolive continued.
“We are going to analyze country by country, market by market, what level of competitiveness we need to have to stay in the game,” he concluded.
Citroën has already lowered its prices
At Stellantis we don’t want to talk about lower prices yet, but Philippe de Rovira acknowledges that “the environment is changing”. According to the director of the subsidiaries of the 14-brand manufacturer, “the price increase registered in 2021 and 2022 will probably not be repeated in 2023, prices will surely stabilize.”
In fact, however, Citroën, one of Stellantis’ portfolio brands, already lowered the prices of its electric C4 in early April. The ë-C4 saw its price drop by 4,710 euros. “We have found a production capacity and a logistics capacity that allows us to make this proposal”, explains Sébastien Caron.
With this offer, Citroën’s strategy is to respond “to market expectations”, develops the company’s new director in France, who adds: “manufacturers have entered into an inflationary spiral and have put themselves on the sidelines”. If the test is conclusive on the electric C4, Citroën could thus apply price reductions to other of its models in the coming months.
For many industry analysts, manufacturers will one day or another be forced to respond to the offensive of Elon Musk’s car brand.
“Tesla is a reference in the electrical sector. If the company moves, the others are obliged to follow it”, analyzes Olivier Hanoulle, automotive specialist at Roland Berger.
“If manufacturers do not want to lose market share, they are forced to align, even if it means cutting their margin,” continues the expert.
An inevitable price war
Still, not all auto players have as punching power or solid kidneys as Tesla. “Manufacturers that today only achieve a small operating margin run the risk of finding themselves in difficulties,” says an insider in the sector, who adds: “for some, such as Renault, it will be difficult”.
With the announced end of the semiconductor crisis and the rebalancing of supply and demand, “it is the end of the enchanted parenthesis for manufacturers”, observes Olivier Hanoulle, “if we add to this the arrival on the market of new players such as Chinese groups, a price war seems inevitable in Europe”.
Source: BFM TV
