Tesla has the cut its price again in a number of major markets including the U.S. China and Germany as the electric car giant run by multi-billionaire Elon Musk faces falling sales. Tesla’s U.S. and China price drop, its two key markets is happening, after disappointing Q1 sales contributed to rise in inventory. Tesla’s move to cut prices comes after it reported a sharp fall in its global vehicle deliveries in the first three months of this year.
Tesla is due to report financial results for the first quarter of 2024 after the US market close on Tuesday.
Tesla announces price cut
In a post on social media platform X, formerly Twitter, Elon Musk said “Tesla prices must change frequently in order to match production with demand”.
In China, the firm cut the starting price of the revamped Model 3 in China by 14,000 yuan ($1,934; £1,562) to 231,900 yuan.
Prices of the Model Y, Model X and Model S vehicles in the U.S. were cut by $2,000 (£1,616) on Friday.
There were also price cuts in many other countries in Europe, the Middle East and Africa, according to the Reuters news agency.
Tesla sale falls
The swathe of price cuts comes after the company reported this month that its global vehicle deliveries and sales in Q1 had fallen for the first time in nearly four years.
EV price war
A price war has been intensifying between EV makers, with particularly fierce competition coming from Chinese firms.
The company triggered an EV price war over a year ago when it aggressively cut prices at the expense of profit margins.
Tesla has been slow to refresh its ageing models while rivals in China, such as BYD and Nio, have been rolling out cheaper models. Chinese smartphone maker Xiaomi also launched its first EV last month.
Layoffs at Tesla
Last week, Tesla announced plans to lay off more than 10% of its global workforce, about 14,000 jobs.
Other issues faced by Tesla
On Friday, the firm recalled thousands of its new Cybertrucks over safety concerns.
It is because their accelerator pedals currently risk getting trapped by the interior trim, increasing the possibility of crashes. Musk has also faced criticisms from investors who say he is stretched too thin after his purchase of the social media platform Twitter, which he renamed X, in 2022. Meanwhile, Tesla has asked its shareholders to vote in favor of Musk’s $56bn pay package, which was rejected this year by a judge who called it an “unfathomable sum”.
“This is another black eye for Tesla, which has added to the chaos going on for Musk,” said Dan Ives, senior equity analyst at Wedbush Securities. “Cybertruck is the pedestal moment and a recall out of the gates is a bad look.”
The price cuts ended a chaotic week for Tesla.
Tesla stock update
Tesla shares fell below $150 this week, wiping away all gains the company made in the past year. Tesla’s shares have fallen by more than 40% since the start of this year.
