Part 6/11:
This aggressive pricing strategy in Europe is indicative of a deliberate effort to stimulate demand and expand Tesla’s Total Addressable Market (TAM). Economic factors like Value Added Tax (VAT) also influence sticker prices, often making European prices appear higher—but when converted to lease terms and net pricing, the cuts are significant.
Moreover, leasing data underscores the intense price competition and Tesla’s willingness to offer lower monthly payments in Europe, especially in Germany where lease prices for the standard Model Y are substantially reduced. The difference in leasing conditions suggests Tesla is prioritizing volume growth over margins in these markets.