Tesla is cutting the price of its best-selling cars around the world to stem a sales slump
Tesla appears to be dealing with a recent sales slump by cutting the price of some of its most popular models. Starting in the US late Friday, where it slashed the price of the Model Y, Model X and the older Model S, the EV maker quickly rolled out discounts to China and then Germany.
According to The guard, the cuts lowered the starting price for a Model Y to $42,990 (about £34,850 / AU$66,700), and to $72,990 (£59,100 / AU$113,350) for a Model S and $77,990 (£63,200 / AU$121,100) for a Model This represents a saving of approximately $2,000 (£1,600 / AU$3,100).
Meanwhile, in China, the newly updated Model 3 was reduced by 14,000 yuan (about $1,930 / £1,560 / AU$3,000) to 231,900 yuan ($32,000 / £30,000 / AU$49,700), Tesla’s official website showed.
The same model was also discounted in Germany, where it dropped from an original price of €42,990 to €40,990 (£35,400 / $43,670 / AU$67,825).
Fighting fires on several fronts, Tesla has found itself at the center of a price war fueled by cheaper electric vehicles from China, many of which are quickly making their way into markets previously ruled by the Californian company.
Furthermore, Elon Musk caused confusion by stating that he was shifting his focus to driverless robotaxis, likely at the expense of Tesla’s cheaper Model 2, which would have made it more competitive with the likes of BYD, its biggest rival.
The Tesla price cut continued in other countries in Europe, the Middle East and Africa, while the company also said it was cutting the subscription costs of its membership program that provides access to its Supercharger network in Britain. Coach.
Membership allows non-Tesla EV owners to access the extensive network of charging stations at a more affordable rate per kW, and previously cost £10.99 (about $13.50 / AU$20) per month, but has since reduced to £8.99 (about $11/AU$17) to attract more users.
The announcement of the price changes comes as Tesla revealed it was cutting 10 percent of its global workforce in an effort to save money and streamline its operations. As a result, Tesla shares fell below $150 this week, wiping nearly $100 off the high seen in December last year.
Analysis: EV competition hits hard
Elon Musk is not averse to lowering prices to fuel competition and reduce growing inventories. brutal EV price war in China last year when he lowered the asking price of some Teslas by almost 50 percent compared to their sticker price in the US.
Bloomberg says Musk takes risks the start of a new round of price cutss, when Li Auto Inc immediately responded to the Model 3 price drop by cutting the cost of its L7 five-seat SUV, even going so far as to honor the new price with recent customers and offer cash rebates to existing owners.
Tesla seems to be doing everything it can to generate more sales, after disappointing delivery figures at the start of the year. In the US, the company has halved the cost of its Full Self-Driving plan in an effort to acquire new paying users and strengthen an alternative revenue stream.
Things are looking bad for Tesla, especially considering Musk is still asking shareholders to back his own previously rejected $56 billion pay packagedespite the brutal layoffs, price cuts and concerns about unreliable accelerator pedals in Cybertruck.
Tesla is set to report its first-quarter earnings tomorrow, with Musk likely to face some tough questions from disgruntled investors.