Tesla Announces Global Price Reductions Amid Falling Sales and Market Turbulence
Tesla reduced prices on 3 of its 5 models in the US on April 19, followed by global price cuts in key markets, including China and Germany. All these price slashes happened over a weekend as the company is responding to declining sales, a Cybertruck recall, and increasing competition in the electric vehicle (EV) sector.
According to the Guardian, Tesla reduced the prices of the Model Y, its top-selling small SUV and the leading electric vehicle in the US, and the older, higher-end Models X and S. However, the prices of the Model 3 sedan and the Cybertruck remained the same.
The price cuts reduced the starting price of a Model Y to $42,990, $72,990 for a Model S, and $77,990 for a Model X, as mentioned on Tesla’s official website. On April 20, Tesla also lowered the US price of its “Full Self-Driving” driver assistance software from $12,000 to $8,000.
Two days after these price reductions were announced, Tesla also announced a reduction to the starting price of the revamped Model 3 in China by 14,000 yuan ($1,930) to 231,900 yuan ($32,000).
A Tesla spokesperson told the Guardian that these price reductions are also implemented in various other countries across Europe, the Middle East, and Africa.
The widespread price cuts by Tesla were made after the company reported a drop in global vehicle deliveries for the first time in nearly 4 years. This move is an effort to increase sales and regain market momentum during a challenging period for car manufacturers.
The Guardian points out that CEO Elon Musk also faces criticism over potential distractions. His acquisition of the social media company Twitter now rebranded as X, has sparked concerns among investors about his ability to maintain focus on Tesla’s core automotive business.
Tesla’s problems don’t end here. The Company’s stock value tumbled below $150 this week. Tesla also announced a significant workforce reduction to regain stability, planning to cut 10% or about 14,000 jobs.
Also, Tesla is pushing for shareholder approval of Musk’s controversial $56 billion compensation package. This effort follows a judge’s rejection of the package, describing it as an “unfathomable sum,” highlighting the conflict between Tesla’s leadership goals and external skepticism about its financial and management strategies.
Elon Musk also recently postponed a meeting with India’s Prime Minister Narendra Modi, citing “very heavy obligations” to Tesla. He announced on X his intention to reschedule the visit for later in the year, highlighting the intense demands within the company and impacting its international expansion efforts.
