Weak yen + government subsidies drive the price of Tesla, Inc. (TSLA.US) Model Y below $23,000 in Japan

Tesla, Inc. (TSLA.US)'s best-selling electric vehicle model has hit the world's lowest price in Tokyo. Driven by a weak yen combined with generous central and Tokyo local government subsidies this year, the Model Y's out-the-door price can be pushed below $23,000. That price is even lower than what a tourist would pay for a vintage Rolex Oyster Perpetual Datejust at a watch shop in Tokyo. Tesla, Inc. is heavily promoting this subsidy through advertising as it seeks to compete in Japan's auto market, which is dominated by Toyota (TM.US) and Suzuki (SZKMY.US). In the first half of this year, the Model Y became Japan's most imported vehicle model, with this SUV produced at Tesla, Inc.'s Shanghai Gigafactory. On the other hand, U.S. President Trump has been pushing for more American cars to be exported to Japan. The U.S. and Japan are also looking at the $550 billion investment plan established under an agreement reached last year, in exchange for which the U.S. agreed to lower tariffs on Japanese auto imports. Tesla, Inc.'s Japanese website lists the Model Y's guide price at 5.6 million yen. But Tokyo residents can stack up to about 2 million yen in combined government and city-level subsidies, bringing the actual purchase price down to as low as 3.6 million yen ($22,889). With the same benefits, the Model 3 can be had for as little as 3.3 million yen. This price in Japan is even lower than in the fiercely competitive Chinese market where the Model Y starts at about 263,500 yuan ($39,344). And in California, even with local subsidies of up to $3,500 for first-time EV buyers, this SUV still sells for more than $36,000.