Tesla Price Cuts across its vehicle lineup in the United States, China, and Europe. This move comes in response to declining sales and growing competition in the electric vehicle (EV) market. The price adjustments follow a challenging week for Tesla, which also included a Cybertruck recall and workforce reductions.
Tesla Price Cuts Announced Across Tesla Models
In the United States, Tesla directly reduced prices for the Model Y, its best-selling electric vehicle. They also cut prices on the Model S and Model X. Tesla lowered the starting price of the Model Y to $42,990. The Model S and Model X saw reductions to $72,990 and $77,990, respectively. Additionally, Tesla slashed the price of its Full Self-Driving driver-assistance software from $12,000 to $8,000.
The price cuts extended internationally. Tesla actively lowered the starting price of the revamped Model 3 in China by 14,000 yuan ($1,930). They also reduced the price of the Model 3 rear-wheel drive in Germany to €40,990 ($43,670.75). Similar price reductions were announced by Tesla in other countries across Europe, the Middle East, and Africa.
Tesla Price Cuts Follow Declining Sales
These price adjustments follow Tesla reporting a decline in global vehicle deliveries for the first quarter of 2024. This marks the first such decrease in nearly four years. The company’s stock price also fell below $150 per share this week, erasing all gains made in the past year.
Tesla Announces Workforce Reductions
Adding to the company’s challenges, Tesla announced a 10% reduction in its global workforce. This resulted in the elimination of approximately 14,000 jobs. Investors criticized CEO Elon Musk, believing he is stretched too thin due to his involvement with other ventures. Tesla made this decision in response to those criticisms.
Cybertruck Recall Presents Additional Setback
Tesla’s week got even worse with a recall of all Cybertrucks. The recall is due to malfunctions with the vehicle’s accelerator pedal. The issue could potentially cause the vehicles to become stuck at full speed, posing a safety risk to drivers.
Industry Uncertainty Surrounds Tesla’s Future
Industry analysts continue to wait for Tesla to introduce its lower-priced Model 2 electric vehicle. The Model 2 was initially projected to cost around $25,000. Recent media reports suggested the project’s cancellation. This has created further uncertainty regarding the company’s future direction.
Tesla to Announce First-Quarter Earnings
Tesla is scheduled to announce its financial results for the first quarter of 2024 on Tuesday. The company’s sales figures are expected to reflect the increasingly competitive EV market and the impact of earlier price cuts.
Related Reads: Tesla Navigating Stormy Waters: Challenges and Opportunities in Q1
Sources:
Tesla cuts U.S. prices on its Model Y, S and X vehicles after a difficult week: https://www.nbcnews.com/business/business-news/tesla-cuts-us-prices-3-electric-vehicle-models-difficult-week-rcna148693 (NBC News)
Tesla shares slide further after price cuts in major markets over the weekend: https://www.forbes.com/sites/roberthart/2024/04/22/tesla-shares-slide-further-after-price-cuts-in-major-markets-over-the-weekend/ (Forbes)
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