Volvo reacts to the sharp drop in prices at Tesla and says it does not want to join the game of the American brand. Like Volkswagen, Renault or even Fisker, the Swedish firm would indeed not need it.
This is a case that has had the effect of a real bomb on the automotive planet. While Tesla had always refused to make discounts, although its prices have long been accustomed to changing, now the firm has decided to make an incredible drop in its prices. A real tumble for the Model 3 and Model Y going up to 13,000 euros, which follows a difficult end of the year for the manufacturer despite a record of deliveries.
Drops, but not for everyone
However, not all manufacturers want to join Tesla’s game, which no doubt hopes grab some market share by making such a price reduction. The firm is also most likely worried about the rise of Chinese brands, which could hurt it in the coming months.
A competition that does not scare everyone, and especially not Volvo. Perhaps because the Swedish firm has belonged to the Chinese group Geely since 2010, which also owns Lynk & Co, Lotus and the young Geometry brand. Anyway, the manufacturer says loud and clear not have the slightest intention of reducing its pricesas confirmed by Jim Rowan, general manager of the brand, relayed by the American agency Reuters.
No immediate need for Volvo
Indeed, the manager points out that “ we do not see [de baisses de prix] For now“, while he explains that ” demand is the highest we have ever seenand the order book too“. The brand therefore has no reason to reduce its prices in order to attract customers, who already seem to be convinced. Indeed, in its press release revealing its sales figures for 2022, Volvo announces revenue up 17%despite a slightly lower EBIT margin, at 6.8% compared to 7.2% last year.
A small fall that we probably owe to the rise in the cost of raw materials, and in particular lithium. Indeed, the firm has greatly increased its registrations of electric cars, which accounted for 11% of total sales, compared to 4% last year. In the 4th quarter of 2022, this figure even reached 18%.
As a reminder, Volvo currently markets the XC40 and the C40 Recharge and has just lifted the veil on the new EX90, replacing the XC90. Later, another compact SUV called EX30 will also see the light of day.
The autonomy – price ratio of the XC40 and C40 Recharge has been more interesting for a few weeks, thanks to the launch of a new engine coupled with a new battery.
But Volvo is not the only brand to refuse to take part in this price war. Indeed, Volkswagen has decided not to lower the price of its ID.3, ID.4, ID.5 and ID. Buzz and even increased them last December. Porsche plans to raise the price of its cars by 6%, according to a dealer quoted by Automotive Newsas it prepares for the launch of a future electric SUV placed above the Cayenne.
Renault does not want to lower its prices either
Finally, Renault also refuses to enter this game, while the firm explains that it does not have enough leeway due to the high price of the battery. The only solution to lower the cost of cars is then to reduce the size of the latter, while waiting for solid accumulators. On his side, Fisker says its order book is already full and that discounts are not necessary.
On the side of Tesla, the sedan and the SUV are now eligible for the ecological bonus of 5,000 euros in France, which should allow the firm of Elon Musk to attract new customers despite the turn of the screw given by the government. Indeed, since January 1, only cars under 47,000 euros can benefit from the aid. But inevitably, this price drop did not take long to make competitors react of the brand of Elon Musk.
This is particularly the case of Xpeng, VinFast or even Ford and Toyota, among others. Their common point? Have all decided to review their pricing strategy. While most have simply lowered the prices of their electric cars, Lucid has chosen to reduce the monthly rental payment for its Air sedan, which is equivalent to a discount of 7,500 euros. An amount that is identical to that of the tax credit proposed by the US government for electric cars manufactured in North America.
While several manufacturers have decided to join Tesla’s game by lowering their prices, some like Renault or Fisker are radically opposed to it. For them, reducing their rates is at best absolutely…
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