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Business News/ Auto News / Tesla Price Cuts: Elon Musk's automaker company slashes prices in China, US amid inventory rise as sales slump

Tesla Price Cuts: Elon Musk's automaker company slashes prices in China, US amid inventory rise as sales slump

Tesla Price Cuts: In response to a sales downturn, Tesla has reduced prices across key models in China and the US, while facing operational challenges including executive departures and a significant recall.

An electric vehicle of the Tesla model Y (Patrick Pleul / POOL / AFP)Premium
An electric vehicle of the Tesla model Y (Patrick Pleul / POOL / AFP)

Tesla Price Drop: Elon Musk's automaker company, Tesla Inc. has lowered the prices of its electric vehicles in China and the United States, two key markets on April 21. This development follows the weak sales for the automaker in the first quarter, resulting in rising inventories, as per Bloomberg report.

Tesla Model Y price drop update

Tesla slashed the price of its updated Model 3 to 231,900 yuan ($32,000) from the earlier 245,900 yuan and Model Y to 249,900 yuan (about $34,500) from 263,900 yuan in China.

The carmaker has also lowered the starting price of the Model Y to $42,990 in the U.S., the most minor entry price for the sport-utility vehicle so far. Tesla slashed prices for the more premium versions of the Model Y and Model X by $2,000—marking their lowest price ever, as per the Bloomberg report.

This pricing adjustment only capped a turbulent week for the Austin-based automaker, which began with an announcement from the CEO of a global workforce reduction exceeding 10 per cent, affecting over 140,000 employees. Two other senior executives also left this week, the report further added.

Tesla recalls all cybertrucks

Making the company's life yet more complex, Tesla has just announced a recall of nearly 3,900 of its Cybertruck pickups for problems associated with the accelerator pedals that may increase the risk of a crash. That was because the pedals in the truck could dislodge, which then caused the car to accelerate accidentally.

It also, on corporate governance, said that Tesla had revealed plans to resubmit a $56 billion compensation package for Musk to shareholders for voting after a void by a Delaware court earlier in the year.

Elon Musk visit to India postponed

Musk had also put off a scheduled tour of India, where he was to meet Prime Minister Narendra Modi, citing pressing commitments at Tesla.

Meanwhile, Tesla is set to report first-quarter earnings on April 23. The shares are down more than 40 per cent for the year amid concerns over falling sales, increasing competition in China, and Musk’s aggressive push into full self-driving technology.

Among other market challenges for Tesla, Bloomberg noted a declining share in China to 6.7 per cent in the fourth quarter of last year from 10.5 per cent at the beginning of 2023. Nevertheless, the company fine-tunes its strategy to respond to the variable market conditions and internal company dynamics.

(With Inputs from Bloomberg)

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Published: 21 Apr 2024, 08:57 AM IST
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