Tesla Reduces Prices On Model 3 And Y

Demand for electric vehicles is booming in the UK, and it’s becoming a crowded market as newcomers offer longer ranges and more choice for consumers. Now Tesla has disrupted the market further, rolling out list price cuts of between 6% and 13% for the UK’s best-selling cars – the Model 3 saloon and Model Y SUV.

The carmaker claims the changes are underpinned by improvements to its manufacturing process and a more stable supply chain following recent disruption. However, price reductions could affect both the residual values and monthly rental costs for LeasePlan customers. Here’s what you need to know.

Consumers have got used to rising prices recently, and it’s affected vehicles too. With shortages of semiconductors, rising materials and energy costs and demand outstripping supply, our data shows an average 7.1% increase in new car list prices since January 2021. The Tesla announcement suggests this could be about to stabilise.

The Model Y and Model 3 were already the best-selling EVs in the UK in 2022, accounting for a combined 20% of the market (54,622 vehicles) according to the SMMT. By reducing the price, Tesla has brought them in line with or undercut key rivals, such as the Ford Mustang Mach-E, Hyundai IONIQ 6 and Polestar 2.

Monthly rentals are calculated based on the vehicle price when new, and its predicted residual value once it reaches the end of the contract. It should be noted that large reductions in the list price affect both values.

• Quotes for new orders will reflect the new pricing and this applies right away.
• Orders which haven’t been delivered will also benefit from reduced monthly rentals, as LeasePlan has taken the decision to implement the price reduction across all Tesla 3 and Y orders. Customers will be contacted on a case by case basis.
• Customers with delivered vehicles will continue to pay the monthly rental agreed at the start of their contract.

To find out more about how the changes to Tesla’s pricing affects your drivers, please speak to your LeasePlan Account Manager who will be happy to help.