Tesla cuts prices in China, US after slow sales adding to excess inventories

Tesla Inc. has lowered pricing in its two main markets, China and the US, following underwhelming first-quarter sales that added to excess inventories.

All of Tesla’s pricing have dropped in China. The updated Model 3 is now only 231,900 yuan ($32,000) instead of 245,900. The Model Y was reduced from 263,900 yuan to 249,900 yuan, or around $34,500.

The Model Y’s beginning price in the US has dropped to $42,990, which is the lowest it has ever been for this sport utility vehicle. In addition, Tesla slashed the price of the Model X to its lowest point ever and gave a $2,000 reduction on the two other, more costly Model Y models.

Even by CEO Elon Musk’s standards, the Austin-based manufacturer had an extremely eventful week culminating with these layoffs. It all began when Musk informed the more than 140,000 workers in the company’s memo that he was cutting staff by more than 10% worldwide. Additionally, two senior executives departed.

In its proxy statement on Wednesday, Tesla said that it will put the $56 billion pay plan for Musk up for another vote among shareholders. The deal had been ruled unlawful by a Delaware court in January.

Additionally, the business recalled about 3,900 Cybertruck pickups on Friday in order to repair or replace accelerator pedals that have a tendency to come loose and accelerate the car accidentally, raising the possibility of a collision.

Then, on Saturday, Musk said that he had to attend to “heavy obligations” at Tesla and cancelled his scheduled visit to India this week, when he was supposed to meet with Prime Minister Narendra Modi.

On April 23, Tesla releases its first-quarter earnings. Due to worries about declining sales, escalating competition in China, and Musk’s reckless vow to go “balls to the wall” on autonomy, the company’s stock has dropped more than 40% this year.

Delivering 386,810 cars in the first quarter, the carmaker had its first year-over-year decline in sales since the early stages of the epidemic, falling far short of expert projections.

Based on China’s Passenger Car Association statistics, Bloomberg calculated that Tesla’s market share in China decreased from 10.5% in the first three months of 2023 to around 6.7% in the fourth quarter of 2023.

Bloomberg revealed late last month that the manufacturer has lately reduced production plans at its Shanghai facilities. Even while China’s total sales of passenger cars rose, shipments from its Shanghai factory, which produces EVs for China as well as export to other regions of Asia, Europe, and Canada, decreased in the first two months compared to the same period last year.