Tesla has lowered the prices of its electric vehicles in the Chinese, American, and European markets due to disappointing first quarter sales data. "This is the latest shift in pricing strategy for this struggling electric vehicle giant," said Investor Business Daily on the 21st
From the 21st, the price of Tesla Model 3/Y/S/X will be reduced by 14000 yuan in Chinese Mainland. Among them, the selling price of Model Y decreased to 249900 yuan, the selling price of Model S decreased to 684900 yuan, and the selling price of Model X decreased to 724900 yuan. However, not long ago, Tesla also raised the selling price of the entire Model Y series by 5000 yuan.
The price reduction also occurred in the European and American markets. On the 20th, Tesla lowered the selling prices of Model Y, Model S, and Model X in the United States by $2000. After the price adjustment, the starting price of Model Y is $429900 (excluding taxes). For most of February, Tesla offered consumers a temporary discount of $1000, bringing the price down to $429900. On April 1st, Tesla raised the price of the model by $1000. At present, the list price of Model Y has returned to its lowest point. The prices of the Cyber pickup and Model 3 remain unchanged, but the production of these two electric vehicles is still very low.
Meanwhile, starting from the 20th, Tesla will lower the price of the Model 3 by approximately 4% to 7%, or $2000 to $3200, in its main European markets - Germany, France, Norway, and the Netherlands. A few days ago, Tesla began offering low or zero interest loans in several European countries, including Germany.
Bloomberg News reported on the 21st that the price reduction came to an end to a crazy week for the Austin based automaker. Last week, Tesla announced a 10% layoff globally, with a layoff of 14000 people. This layoff action will also affect China, including sales, technology and other departments. Last Friday, the company announced the recall of nearly 3900 Cyber pickup trucks due to the possibility of pedal pads shifting when the accelerator pedal of the vehicle is compressed, causing the vehicle to accelerate unexpectedly and increasing the risk of collision. Affected by this, Tesla's stock price fell 1.92% at the close of last Friday. Last Saturday, Musk announced the postponement of his scheduled trip to India this week to meet with Indian Prime Minister Modi, due to "Tesla's heavy workload.".
Bloomberg reported that Tesla's stock price has fallen by over 40% this year due to declining sales, intensified competition in the Chinese market, and Musk's "extreme" adventure plan in autonomous driving. Since the beginning of the pandemic, Tesla's sales have experienced a year-on-year decline for the first time. Tesla delivered 38681 million cars in the first quarter, far below analysts' expectations. Tesla's market share in China has decreased from 10.5% in the first quarter of last year to around 6.7% in the fourth quarter of 2023. Tesla has recently reduced its production plans at its Shanghai factory. Although the overall sales of passenger cars in China have increased, the company's Shanghai factory's shipment volume in the first two months of this year has decreased compared to the same period last year. This factory not only produces electric vehicles for China, but also exports them to Canada, Europe, and other regions in Asia.
According to Investor Business Daily, Tesla is facing enormous pressure in the Chinese market as competitors are launching new models with advanced features and lower prices. Tesla's previous price hikes seemed to be aimed at improving profit margins, even at the cost of sacrificing sales, but last weekend's price reduction strategy showed that Tesla is concerned that demand is declining too quickly. Now, investors are all focused on the Tesla Q1 earnings conference call scheduled for April 23rd, wanting to know how Tesla plans to revive its performance.