Tesla, the renowned electric vehicle (EV) manufacturer, has recently made significant price reductions in key markets like China and Germany, following similar actions taken in the United States. This move comes amidst a backdrop of declining sales and increased competition in the EV industry, particularly from Chinese EV manufacturers.
The price adjustments come on the heels of Tesla CEO Elon Musk’s announcement regarding a decrease in global vehicle deliveries in the first quarter, the first decline in nearly four years. Musk highlighted the importance of adjusting prices frequently to ensure production aligns with demand.
As a dominant player in the EV market, Tesla ignited an EV price war over a year ago by aggressively slashing prices, albeit at the cost of profit margins. For example, the starting price of the revamped Model 3 in China was reduced by 14,000 yuan (,930) to 231,900 yuan (,000). Similarly, in Germany, the price of the Model 3 rear-wheel-drive was cut to 40,990 euros (,670.75) from 42,990 euros.
A Tesla spokesperson confirmed that price adjustments have been implemented in several other countries across Europe, the Middle East, and Africa. In the United States, Tesla reduced the prices of its Model Y, Model X, and Model S vehicles by ,000 each. Additionally, the company announced a price reduction for its Full Self-Driving driver assistant software, now priced at ,000 from the previous ,000.
However, Tesla’s delay in refreshing its older models coincides with consumer interest waning due to high interest rates. Meanwhile, competitors in China have been introducing more affordable EV models as the country remains the world’s largest auto market.
Elon Musk’s planned trip to India, where he was expected to meet with Prime Minister Narendra Modi and announce Tesla’s entry into the South Asian market, was postponed over the weekend. This delay came in the midst of Musk’s announcement that Tesla would be laying off over 10% of its global workforce as the company braces for its first annual decline in deliveries. This decision followed a Reuters report suggesting that Tesla had abandoned plans for an affordable EV in favor of focusing on robotaxis, which Musk refuted by stating, “Reuters is lying,” without providing further details.
Investors have been left seeking clarity, with Tesla stocks having dropped by 40.8% so far this year. The market eagerly awaits further developments from the EV giant as it navigates through a period of significant changes and challenges.
