Tesla Cuts Car Prices by Almost $2,000 in China Following US Price Reductions

Tesla has made significant price cuts to several of its vehicle models in China. The starting price for the Model Y is now 249,900 yuan, the regular Model S is priced at 684,900 yuan, and the Model S Plaid is 814,900 yuan. The regular Model X’s price has been reduced to 724,900 yuan, with the plaid variant now at 824,900 yuan.

In addition to the price cuts in China, Tesla also slashed the prices of its Model Y, Model X, and Model S vehicles by $2,000 in the United States. Furthermore, the cost of Tesla’s Full Self-Driving driver assistant software was reduced from $12,000 to $8,000 in the U.S. These price reductions come after Tesla reported a decline in global vehicle deliveries in the first quarter, attributed to lackluster demand despite the price cuts.

The company has been slow to update its models due to consumer reluctance caused by high interest rates. Moreover, competitors in China, the world’s largest auto market, are introducing more affordable models. Elon Musk, Tesla’s CEO, postponed a planned trip to India where he was scheduled to meet with Prime Minister Narendra Modi and announce Tesla’s plans to enter the South Asian market.

Additionally, Musk announced that Tesla will lay off more than 10% of its workforce as the company anticipates its first annual drop in deliveries. Recent reports suggested that Tesla had abandoned its affordable EV project in favor of robotaxis, but Musk refuted these claims, stating that “Reuters is lying.” The uncertainty surrounding Tesla’s future plans has left investors seeking more clarity.

As a result of these developments, Tesla shares have fallen by 40.8% since the beginning of the year.