Tesla Slashes Prices in US, China, and Germany To Battle Rising Competition

Following significant price cuts in the U.S., Tesla has revealed that similar reductions will be applied in China and Germany as well. This decision comes as the electric vehicle (EV) manufacturer faces challenges with decreasing sales and heightened competition in key global markets.

The automobile giant’s recent price reductions are part of a continued effort going back to early last year to sustain demand at a time of increased competition from traditional automakers’ EV offerings and rising interest rates. These factors have made car purchases more expensive for many consumers. However, these ongoing price adjustments have put pressure on Tesla’s profit margins and played a key part in a 4% drop in its stock during Monday’s trading session. The company plans to release its first-quarter earnings report after today’s trading hours.

Over the weekend, Tesla reduced the initial starting prices of four models available in mainland China, its largest international market, by 14,000 yuan ($1,932). This includes the Model Y, Tesla’s best-selling vehicle in the country, which now starts at its most affordable price ever of 249,900 yuan ($34,502).

According to information on its official website, Tesla’s largest market in Europe, Germany, saw a drop in the price of its Model 3 rear-wheel drive by 2,000 euros ($2,132) to 40,990 euros ($43,707).

On Friday, the initial price cuts were announced in the U.S., with Tesla reducing the prices of three out of its five models. The Model Y, Model X, and Model S saw reductions of $2,000 each, while prices for the Model 3 and Cybertruck were kept the same.

The rapid price reduction comes during a challenging time for Tesla. Its stock has plummeted over 40% in comparison to the same time last year after the company revealed a drop in quarterly deliveries for the first time in nearly four years and after it announced layoffs of more than 10% of its global staff.

Additionally, Tesla’s CEO Elon Musk said on Saturday that he had pushed back his scheduled trip to India to meet with Prime Minister Narendra Modi to build a factory in the region due to “very heavy” commitments at the company.