Tesla has implemented price reductions in several key markets, including China and Germany, following similar actions taken in the United States. This adjustment comes as the company faces declining sales and heightened competition in the electric vehicle (EV) market, particularly against Chinese EV manufacturers.
These price cuts coincide with Tesla’s recent announcement, made by its billionaire CEO Elon Musk, regarding a decrease in global vehicle deliveries in the first quarter for the first time in nearly four years. Musk emphasized the necessity of frequent price adjustments to align production with demand.
As the leading player in the EV market, Tesla sparked an EV price war over a year ago by aggressively lowering prices, albeit at the expense of profit margins. Notably, the starting price of the revamped Model 3 in China was reduced by 14,000 yuan ($1,930) to 231,900 yuan ($32,000), as indicated on its official website. Similarly, in Germany, the price of the Model 3 rear-wheel-drive was trimmed to 40,990 euros ($43,670.75) from 42,990 euros, where it had remained since February.
Furthermore, Tesla spokesperson confirmed that price adjustments have been made in numerous other countries across Europe, the Middle East, and Africa.
On Friday, Tesla reduced the prices of its Model Y, Model X, and Model S vehicles in the United States by $2,000 each. The following day, Tesla announced a price cut for its Full Self-Driving driver assistant software, reducing it to $8,000 from $12,000 in the United States.
Tesla’s delay in refreshing its aging models comes as high interest rates dampen consumer interest in high-value purchases. Meanwhile, competitors in China, the world’s largest auto market, are introducing more affordable models.
Over the weekend, Elon Musk postponed a planned trip to India, where he was scheduled to meet Prime Minister Narendra Modi. The trip was expected to involve the announcement of Tesla’s entry into the South Asian market, as reported by Reuters on Saturday.
Musk’s announcement last Monday regarding Tesla’s plans to lay off over 10% of its global workforce comes as the automaker prepares for its first annual decline in deliveries. This decision followed a Reuters report on April 5 indicating that Tesla had abandoned its plans to develop an affordable electric vehicle in favor of focusing on robotaxis. Musk responded to the report by stating that “Reuters is lying,” without specifying any inaccuracies. However, he has not provided further information about the model, leaving investors seeking clarity. So far the Tesla stocks have dropped by 40.8% in the current year.
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