Tesla, a well-known electric vehicle (EV) manufacturer, has recently made significant price cuts in key markets such as China, Germany, and the United States.
According to British media on April 22, the move is because the company is facing pressure from declining sales and increased competition around the world.
In Chinese mainland, Tesla lowered the starting prices of four models by 14,000 yuan ($1,932), its largest overseas market. For the popular Model Y in particular, the starting price now stands at 249,900 yuan ($34,502), reflecting Tesla's strategy to stimulate demand amid fierce competition.
Similarly, in Germany, Tesla lowered the price of its Model 3 rear-wheel drive model by 2,000 euros ($2,132) to 40,990 euros ($43,707) to remain competitive in its main European market.
The adjustments come after Tesla's first price cut in the U.S., with the company reducing the price of each of its three models by $2,000. Despite these efforts, Tesla's stock price has fallen sharply by more than 40% so far this year, in part due to a decline in quarterly deliveries and the attendant layoffs.
Tesla's CEO, Elon Musk, recently postponed his planned trip to India due to urgent tasks within the company. The delay has raised questions about Tesla's expansion plans in India, including plans to build a factory that are expected to be confirmed during Musk's visit.
Meanwhile, in China, the world's largest electric vehicle market, Tesla's price cuts have exacerbated an already fierce competitive landscape. Li Auto, a Chinese electric vehicle maker, reacted quickly by lowering the prices of its various models, further intensifying competition in the field.
Tesla's dominance in China has been challenged by local rivals such as local Chinese company BYD, which briefly overtook Tesla as the world's best-selling EV brand in the fourth quarter of last year.
BYD's competitive pricing, with its entry-level model costing around $10,000, poses a significant threat to Tesla's market share, especially after Tesla's recent price cuts, with its cheapest Model 3 costing around $32,000.
It is reported that the price war in China's electric vehicle market dates back to 2022, when Tesla cut prices in order to stimulate sales in response to the economic slowdown. Since then, a wide range of manufacturers, including traditional gasoline car manufacturers, have jumped into the fray, impacting the profitability of the entire automotive industry.
In 2024, the competition continues, with more than 30 major automakers already announcing further price cuts. Xpeng Motors, a well-known EV maker based in Guangzhou, recently announced huge subsidies for buyers, while BYD and Xiaomi have also stepped up their efforts to challenge Tesla's dominance in the EV market.