Tesla, led by Elon Musk, has once again slashed prices in major markets like the US, China, and Germany amidst a decline in sales. This move follows a notable drop in global vehicle deliveries during the first quarter of 2024. A fierce pricing competition among electric vehicle (EV) manufacturers, particularly from Chinese companies, has intensified.
Scheduled to release its financial results for Q1 2024 after the US market closes on Tuesday, Tesla’s CEO Musk emphasized the necessity of frequent price adjustments on social media platform X (formerly Twitter) to align production with demand.
In China, Tesla reduced the starting price of its revamped Model 3 by 14,000 yuan ($1,934; £1,562) to 231,900 yuan. In the US, prices of the Model Y, Model X, and Model S were slashed by $2,000 (£1,616) last Friday. Similar price reductions were observed across many European, Middle Eastern, and African countries, as reported by Reuters.
This aggressive pricing strategy initiated by Tesla over a year ago, sacrificing profit margins for market share, triggered an EV price war. While Tesla has been slow to update its older models, Chinese competitors like BYD, Nio, and even smartphone maker Xiaomi have swiftly introduced more affordable models.
Tesla also faces other challenges, including workforce layoffs, delays in planned engagements such as a trip to India, and a recent recall of Cybertrucks due to safety concerns related to accelerator pedals. Consequently, Tesla’s shares have plummeted by over 40% since the year’s beginning.
