Tesla was forced to cut prices in the US and around the world just days after it said it would lay off 10% of its global workforce as it struggles with declining sales and higher competition in the EV market.
Car prices in the US, Germany and China were cut this weekend, and the prices of custom Tesla software were also cut in the US.
The cuts come after Tesla, led by CEO Elon Musk, reported its first decline in global car deliveries in four years. Since the beginning of the year, Tesla’s stock price on the NASDAQ has fallen nearly 41% and stands at $147.05 per share at the time of publication.
In the US, prices of Model X, Y and S vehicles were cut by $2,000 on Friday. Just a day later, Tesla lowered the price of its self-driving software from $12,000 to $8,000 in the US.
In China, one of the world’s largest car markets, the Model 3 was reduced by 14,000 yuan ($1,930) to 231,900 yuan ($32,000), the official website showed on Sunday.
The cuts come after Tesla, led by CEO Elon Musk (pictured), reported its first decline in global car deliveries in four years
Car prices in the US, Germany and China were cut this weekend, and the prices of custom Tesla software were also cut in the US.
Elon Musk hinted that more price changes are in store soon
In Germany, the price of the rear-wheel drive Model 3 was reduced from 42,990 euros to 40,990 euros. Many other countries in Europe, the Middle East and Africa also saw Tesla price cuts.
Elon Musk hinted that more price changes are in store soon, writing on
But the latest round of price cuts comes just a week after Musk revealed he would lay off 10% of his company’s global workforce, leaving 14,000 people without jobs.
Musk’s memo said that as Tesla prepares for its next phase of growth, “it is extremely important to look at every aspect of the business with an eye toward cutting costs and increasing productivity.”
Also Monday, two key Tesla executives announced on the social media platform X that they are leaving the company.
Andrew Baglino, senior vice president of powertrain and energy engineering, wrote that he had made the decision to leave after 18 years with the company.
Rohan Patel, senior global director of public policy and business development, also wrote on X that he was leaving Tesla after eight years.
Baglino, who held several top engineering positions at the company and was chief technology officer, wrote that the decision to leave was difficult. “I’ve loved tackling almost every problem we’ve solved as a team and I’m glad I was able to contribute to the mission to accelerate the transition to sustainable energy,” he wrote.
An electric pickup truck is pictured at the Rivian Automotive plant in Costa Mesa, California
Jeff Bezos (pictured) has invested $700 million in Rivian
Tesla knocked about a third off the price of its ‘Full Self Driving’ system
Tesla’s Model 3 is on display at an event a day ahead of the official opening of the Munich Auto Show 2023 IAA Mobility
He has no concrete plans other than spending more time with his family and his young children, but writes that he has difficulty staying quiet for long.
Musk thanked Baglino in a response. “Few have contributed as much as you,” he wrote.
But Tesla isn’t the only EV manufacturer facing financial problems.
Jeff Bezos-backed Rivian is planning a second round of layoffs this year amid a big drop in demand for electric vehicles.
The company cut 10% of its 16,790 employees in North America and Europe in February and now plans to lay off another 1 percent.
This is despite a doubling of the company’s turnover by 2023. Shares in Rivian, which is listed on the stock exchange, have fallen by almost 60% since the start of the year.
Amazon founder Bezos invested $700 million in the automaker, making him its largest shareholder, with Amazon owning a 17% stake in the company.
Electric vehicle makers are facing lower than expected demand and are having to slow production to meet it.
In October, General Motors abandoned plans to have 400,000 hybrid vehicles ready for sale by mid-2024, even as electric vehicle sales were up year-on-quarter. Ford also announced a production delay.
It’s not just American EV companies that are facing the pressure. China’s BYD reported a dramatic drop in sales last year, with a 42% decline in the last quarter of 2023 compared to 2022.
According to a FT In a report on the global electric vehicle slump, traditional auto industry leaders have argued for years that the average consumer is not yet ready for electronic cars.
“While we expected a bad quarter, this was an unmitigated disaster that is difficult to explain away,” analyst Dan Ives told the FT in the wake of Musk’s announcement this week.
Another analyst, Tom Narayan, told the website that the company’s most popular cars, the Y and 3, are “saturated products.”