Tesla cut the prices of three of its five models by $2,000 late Friday, another sign of the challenges facing the electric vehicle maker led by billionaire Elon Musk.
The company cut prices on the Model Y, a small SUV that is Tesla’s most popular model and the best-selling electric vehicle in the US, as well as the Models X and S, its older and more expensive models. Pricing for the Model 3 sedan and Cybertruck remained the same.
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The cuts dropped the starting price for a Model Y to $42,990 and to $72,990 for a Model S and $77,990 for a Model X.
Earlier in the weekend, Tesla cut prices in China and the US, its two main markets, as well as in Europe, after disappointing first-quarter sales helped swell inventories, according to Bloomberg.
Tough week for Tesla, with cuts and layoffs
Late Saturday, the Elon Musk-led company also cut the price of its driver assistance software it calls FSD, or Full Self-Driving, by a third to $8,000 in the US. The price was $12,000.
The promise of a fully autonomous vehicle has long been the key to Tesla’s high valuation. In recent weeks, Tesla has released new versions of its FSD software, and Musk has promised to unveil a special robotaxi on August 8.
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Tesla’s website says customers will get a 30-day trial of full self-driving capability with the purchase of a new vehicle. The website states that “currently enabled features require the active supervision of the driver and do not make the vehicle autonomous.”
The price cuts capped a difficult week for Tesla, which announced Monday that it is cutting 10% of its workforce worldwide, or about 14,000 jobs. Two top executives also left. The company also announced that it is recalling nearly 4,000 of its 2024 Cybertrucks after discovering that the accelerator pedal can stick, potentially causing the vehicle to accelerate unintentionally and increasing the risk of a crash.
Musk also postponed a planned trip to India, where he was expected to meet with Prime Minister Narendra Modi, saying he had to attend to “heavy commitments” at Tesla.
How much the prices of Tesla vehicles fell, the stock of Musk’s company fell
In China, Tesla has cut prices across its range, with the facelifted Model 3 dropping to 231,900 yuan ($32,000) from 245,900 yuan previously. The Model Y has been reduced to 249,900 yuan – or about $34,500 – from 263,900 yuan.
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In the US, the cheapest version of the Model Y now costs $42,990, bringing the sport utility vehicle’s starting price back to its lowest ever. Tesla also discounted the two other most expensive versions of the Model Y by $2,000 and dropped the price of the Model X to its lowest price ever.
Its stock has fallen more than 40% this year on concerns about falling sales, intensifying competition in China and Musk’s risky plan to go “tooth and nail” into autonomy.
The automaker reported its first annual sales decline since the early days of the pandemic, delivering 386,810 vehicles in the first quarter, well below analysts’ estimates.
In China, Tesla’s market share shrank to about 6.7 percent in the fourth quarter of 2023, from 10.5 percent in the first three months of the year, according to Bloomberg calculations based on data from the China Passenger Automobile Association.
