Electric car manufacturer Tesla has announced price reductions in several significant markets, including the United States, China, and Germany, as it grapples with a downturn in sales. This decision follows a notable decline in global vehicle deliveries during the first quarter of this year.
The price adjustments reflect a competitive landscape within the electric vehicle (EV) industry, with heightened rivalry observed, particularly from Chinese EV manufacturers. Tesla’s financial performance for the first quarter of 2024 is scheduled for disclosure after the close of the US market on Tuesday.
Elon Musk, CEO of Tesla, emphasized the necessity of frequent price modifications to align production with consumer demand in a statement on the social media platform X, formerly Twitter.
In China, Tesla reduced the starting price of its updated Model 3 by 14,000 yuan ($1,934; £1,562) to 231,900 yuan. Similarly, prices of Model Y, Model X, and Model S vehicles in the US were slashed by $2,000 (£1,616) on Friday. Price adjustments were also implemented across numerous European, Middle Eastern, and African countries.
BBC News has sought confirmation from Tesla regarding the Reuters report on the price reductions.
Tesla initiated an EV price competition over a year ago by aggressively lowering prices, albeit at the expense of profit margins. However, the company has faced challenges in refreshing its aging models, while competitors in China, including BYD and Nio, have introduced more affordable alternatives. Additionally, Chinese smartphone manufacturer Xiaomi entered the EV market last month.
Last week, Tesla announced plans for workforce reductions exceeding 10% globally. Furthermore, Elon Musk postponed a scheduled trip to India, where he was slated to meet Prime Minister Narendra Modi, citing “very heavy Tesla obligations.”
Additionally, Tesla issued a recall for thousands of its new Cybertrucks over safety concerns related to accelerator pedals potentially getting trapped by interior trim, thereby elevating crash risks.
Tesla’s shares have experienced a decline of over 40% since the beginning of this year.
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