Tesla lowers prices in further response to underwhelming performance
Tesla cars are about to become more affordable. Having already cut prices in the US, the auto maker looks set to do the same in China, Germany and beyond in the region of 5-7%.
The EV market is struggling globally. Elon Musk’s goal of selling around 20 million cars by 2030 is looking fanciful. Tesla is also making more cars than it is shipping. According to first quarter results for 2024 the company produced 43,371 cars but sold 386,810. In response Musk said the company wouild be letting go 10% of its workforce – roughly 1,400 people.
In Germany, home to a large Tesla factory, the Model 3 dropped from €42,990 to €40,990. Model Y, Model X and Models February price of the Model Y also reduced by €5,000.
Other major European markets are also now seeing a price reduction of the Model 3 after the Model Y. In France, Norway and the Netherlands, the selling price is being reduced by up to €3,200.
In China, where Tesla has been feeling pressure from Chinese competitor BYD, prices of the Model 3 are also being pulled down significantly. With a price cut of about €1,800, that car now costs just over €30,000.
The reduction in prices is also happening in some countries in the Middle East and Africa, a spokesman told Reuters news agency.
In the United States, prices had already dropped. Of the Model Y, Model X and Model S, $2,000 went off the price last Friday. Thus, the Model Y, the cheapest of the three, now gets a price tag of about €40,300. That is the lowest price for that model ever in the US.
The purchase price for software for self-driving cars also dropped significantly in the US has also taken a hit with prices reduced from $199 a month to $99 per month.
Founder and CEO of Tesla Elon Musk stated on X that “Tesla often has to adjust its prices to bring production in line with demand”.
Through aggressive pricing, Tesla itself sparked a price war in the electric vehicle market. Although the company now seems to be losing as cheaper, mostly Chinese, models are find their way into Western markets.
At the same time, the EV market is declining worldwide. Tesla has also had to issue a recall on the 3,890 Cybertrucks in circulation owing to an issue with the accelerator pad.
The bad news around Tesla has caused its share price to drop more than 40% on the stock market already this year. Investors are preparing for even worse news to come.
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