As sales decline, Tesla slashes prices in key markets.

Tesla has once again reduced its prices in several major markets, including the US, China, and Germany, as the electric car titan led by billionaire Elon Musk contends with declining sales. This move follows a significant drop in global vehicle deliveries during the first quarter of this year.

A price war among electric vehicle (EV) manufacturers has been escalating, with fierce competition emerging from Chinese companies in particular. Tesla is set to unveil its financial results for the first quarter of 2024 after the US market closes on Tuesday.

In a post on the social media platform X (formerly Twitter), Mr. Musk stated: “Tesla prices must change frequently in order to match production with demand.”

In China, the company slashed the starting price of the revamped Model 3 by 14,000 yuan (£1,562) to 231,900 yuan. Meanwhile, prices of the Model Y, Model X, and Model S vehicles in the US were reduced by $2,000 (£1,616) on Friday. According to Reuters, the news agency, there were also price cuts in numerous other countries in Europe, the Middle East, and Africa.

Tesla ignited an EV price war over a year ago when it aggressively lowered prices, sacrificing profit margins in the process. While competitors in China, such as BYD and Nio, have been introducing more affordable models, Tesla has been slow to refresh its aging lineup. Additionally, Chinese smartphone maker Xiaomi entered the EV market last month.

Last week, Tesla revealed plans to lay off over 10% of its global workforce. Over the weekend, Mr. Musk announced the postponement of a planned trip to India, where he was scheduled to meet Prime Minister Narendra Modi, citing “very heavy Tesla obligations.”

On Friday, the company recalled thousands of its new Cybertrucks due to safety concerns. This recall was initiated because the accelerator pedals of these trucks risk getting trapped by the interior trim, heightening the potential for accidents.

Since the beginning of this year, Tesla’s shares have plummeted by more than 40%.

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