Tesla's slashes prices in China to rev up sales amidst fierce EV competition

Tesla's Global Pricing: Tesla has adjusted its pricing strategy in China, mirroring recent cuts in the United States. The move comes amidst declining sales and heightened competition in the electric vehicle (EV) market, particularly from more affordable Chinese EV brands.

Elon Musk's company reduced the starting price of the revamped Model 3 in China by 14,000 yuan ($1,930), now priced at 231,900 yuan ($32,000), according to its official website on Sunday.

Model price adjustments

Similar adjustments were made to other models: the Model Y now starts at 249,900 yuan, the regular Model S at 684,900 yuan, and the Model S Plaid at 814,900 yuan. Additionally, the regular Model X is priced at 724,900 yuan, while its Plaid variant costs 824,900 yuan.

Tesla also lowered prices of its Model Y, Model X, and Model S in the US by $2,000 on Friday. Furthermore, it reduced the price of its Full Self-Driving driver assistant software from $12,000 to $8,000 in the US on Saturday.

Global delivery downturn

The company recently reported a decrease in global vehicle deliveries for the first quarter, attributing it to insufficient demand despite price adjustments.

Tesla's slow response in updating its ageing models and prevailing high interest rates affecting consumer spending have contributed to its challenges. Meanwhile, competitors in China, the world's largest auto market, are introducing more economical alternatives.

Elon Musk postponed his scheduled visit to India, where he was expected to meet Prime Minister Narendra Modi and unveil Tesla's plans for the South Asian market. The decision was due to obligations at Tesla, according to Reuters.

Workforce reduction plan

In a related development, Musk announced plans to reduce Tesla's global workforce by more than 10 per cent, anticipating the company's first annual decline in deliveries.

Amidst uncertainties, investors are seeking clarity regarding Tesla's long-awaited affordable EV. After reports emerged that Tesla abandoned plans for this model in favour of robotaxis, Musk refuted the claims without providing further details, leaving investors eager for more information.

Tesla's stock has declined by 40.8 per cent this year.

(With Reuters Inputs)