Tesla Slashes Prices of Model Y, X, and S in US Amid Falling Sales and Rising Competition

Tesla has reduced the prices of its Model Y, Model X, and Model S vehicles in the United States by $2,000 each amid falling sales and increased competition in the electric vehicle market. The price cuts come after Tesla reported a record drop in vehicle deliveries in the first quarter of 2024 and missed market expectations.

The Model Y now starts at $42,990, the Model S at $72,990, and the Model X at $79,990 after the $2,000 price reductions. The Model 3 sedan and Cybertruck prices remained unchanged. Tesla CEO Elon Musk claimed the cost of an entry-level Tesla could be as low as $29,490 after factoring in federal tax credits and gas savings. "Prices are now lower than ever," Musk said.

Tesla's stock price has dropped about 40% so far this year due to falling sales and rising competition. The company also announced layoffs of 10% of its global workforce and a recall of nearly 4,000 Cybertrucks due to a potential accelerator pedal issue. Musk postponed a planned trip to India, citing "very heavy Tesla obligations."

Why this matters: Tesla's price cuts and challenges reflect the increasing pressure in the electric vehicle market as more automakers enter the space and offer competitive models. The move to slash prices is an attempt by Tesla to boost sales, maintain market share, and make its vehicles more affordable to a wider range of buyers in the face of slowing demand.

The price reductions come ahead of Tesla's first-quarter earnings report on Tuesday, where investors will be looking for the company's strategy to revive growth. Tesla is facing a sales slump this year and is expected to discuss its plans to cope with the situation during the earnings call. The $2,000 discounts may help Tesla clear inventory of its luxury segment electric vehicles.

Key Takeaways

• Tesla cuts prices of Model Y, X, and S by $2,000 amid falling sales.
• Model Y now starts at $42,990, Model S at $72,990, and Model X at $79,990.
• Tesla CEO claims entry-level Tesla could cost $29,490 after credits and savings.
• Tesla's stock price has dropped 40% this year due to falling sales and competition.
• Price cuts aim to boost sales, maintain market share, and make vehicles more affordable.