LDN - Business

Tesla cuts prices in China, Germany and around globe after US cuts

[April 22, 2024] By Hyunjoo Jin, Ethan Wang and Christoph Steitz

BEIJING/FRANKFURT (Reuters) -Tesla has cut prices in a number of its major markets, including China and Germany, following price cuts in the United States, as it grapples with falling sales and an intensifying price war for electric vehicles (EVs), especially against Chinese EVs.

The price cuts come after Tesla, led by its billionaire CEO Elon Musk, reported this month that its global vehicle deliveries in the first quarter fell for the first time in nearly four years.

"Tesla prices must change frequently in order to match production with demand," Musk posted on X on Sunday.

Tesla, the EV market leader, ignited an EV price war over a year ago by aggressively cutting prices at the expense of profit margins.

Tesla cut the starting price of the revamped Model 3 in China by 14,000 yuan ($1,930) to 231,900 yuan ($32,000), its official website showed on Sunday.

In Germany, the price of the Model 3 rear-wheel-drive was trimmed to 40,990 euros ($43,670.75) from 42,990 euros, where the price had been since February.

There were also price cuts in many other countries in Europe, the Middle East and Africa, a Tesla spokesperson said.

U.S. prices of the Model Y, Model X and Model S vehicles were cut by $2,000 on Friday. On Saturday Tesla slashed the price of its Full Self-Driving driver assistant software to $8,000 from $12,000 in the United States.

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The Tesla logo is seen through a charging station outside a store of the electric vehicle (EV) maker in Beijing, China January 4, 2024. REUTERS/Florence Lo/File photo

Tesla has been slow to refresh its ageing models as high interest rates have sapped consumer appetite for big-ticket items, while rivals in China, the world's largest auto market, are rolling out cheaper models.

This weekend, Musk postponed a planned trip to India, where he was to have met Prime Minister Narendra Modi, citing obligations at Tesla. The trip was to have included the announcement of plans for Tesla to enter the South Asian market, Reuters reported on Saturday.

Musk said last Monday that Tesla will lay off more than 10% of its global workforce as the automaker braces for its first annual drop in deliveries.

The announcement came after Reuters reported on April 5 that Tesla had scrapped plan to develop its long-awaited affordable EV in favour of robotaxis. Musk posted that "Reuters is lying" after the report, without citing any inaccuracies. He has not spoken further about the model, leaving investors clamouring for clarity.

Tesla shares have fallen 40.8% so far this year.

($1 = 7.2403 Chinese yuan renminbi)

($1 = 0.9386 euros)

(Reporting by Ethan Wang, Bernard Orr and Hyunjoo JinAdditional writing by Tom SimsEditing by Michael Perry, William Mallard, Frances Kerry and Leslie Adler)

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