Austin, Texas – Electric vehicle maker Tesla made a strategic move by slashing prices on three of its models in the United States, indicative of the challenges the company is facing under the leadership of billionaire Elon Musk. The price cuts were announced late on a Friday, affecting the Model Y, Model X, and Model S, while the prices of the Model 3 sedan and Cybertruck remained unchanged.
The reductions in prices now make the Model Y available for $42,990, the Model S for $72,990, and the Model X for $77,990. These adjustments come in the wake of Tesla’s stock plummeting below $150 per share, erasing all gains from the past year. The decline in stock price, by approximately 40% this year, is attributed to dwindling sales and heightened competition in the electric vehicle market.
In a social media post on Twitter, Musk highlighted that with a federal tax credit and gas savings factored in, the entry-level Tesla could cost as low as $29,490. Despite speculation and reports suggesting the discontinuation of a small electric vehicle project known as the Model 2, Musk dismissed them as inaccurate. The recent price cuts followed a challenging week for Tesla, marked by the global layoff of 10% of its workforce, totaling about 14,000 employees.
In response to safety concerns, Tesla initiated a recall of nearly 4,000 of its 2024 Cybertrucks, citing issues with the accelerator pedal that could potentially lead to unintended acceleration and increased crash risks. Furthermore, Musk had to postpone a scheduled visit to India to meet with Prime Minister Narendra Modi due to “very heavy Tesla obligations,” with plans to reschedule the meeting later in the year.
Tesla is gearing up to unveil its first-quarter earnings, following a significant decline in worldwide sales in the initial months of the year. The drop in sales, in the midst of a competitive landscape and sluggish growth in electric vehicle sales, marked Tesla’s first quarterly decline in nearly four years. The company’s strategy of price adjustments reflects a broader effort to attract more buyers and remain competitive in the evolving automotive industry.