Part 7/11:
One of the most compelling reasons behind Tesla’s aggressive European pricing is what analysts call price elasticity—the sensitivity of demand to price changes. A detailed model, inspired by analyses from Arc Invest, indicates that pricing below approximately $35,000 can exponentially increase Tesla’s market penetration.
In Germany and France, the new prices push the Model Y into a range where the total available market could grow by hundreds of percent, as more consumers become eligible for affordable EVs.
This aligns perfectly with Tesla’s global desire to maximize volumes, especially in markets with strong regulatory incentives or mandates for EV adoption.