Tesla reduces prices in China and US due to sluggish sales and increasing inventories

Tesla Inc. has made significant price cuts in both China and the US in an effort to boost sales and reduce inventory levels following a disappointing first quarter. In China, Tesla slashed prices on its Model 3 and Model Y, with the Model 3 now priced at 231,900 yuan and the Model Y at 249,900 yuan. In the US, the cheapest version of the Model Y is now $42,990, the lowest starting price yet.

The price cuts come amidst a tumultuous week for the electric vehicle maker. CEO Elon Musk announced a global headcount reduction of more than 10% and two top executives left the company. Additionally, Tesla will ask shareholders to vote again on a $56 billion compensation package for Musk that was voided by a court in January. The company also recalled nearly 3,900 Cybertruck pickups to fix accelerator pedal issues.

Musk’s planned trip to India was postponed due to “heavy obligations” at Tesla, further adding to the company’s recent challenges. Tesla’s stock has plummeted more than 40% this year, reflecting concerns about sales, competition in China, and Musk’s ambitious autonomy plans.

Despite these setbacks, Tesla is gearing up to report its first-quarter earnings on April 23. The company delivered 386,810 vehicles in the first quarter, falling short of analyst estimates. In China, Tesla’s market share has declined, prompting production schedule adjustments at its Shanghai factory.

As Tesla navigates these challenges, investors and industry observers will be closely watching to see how the company rebounds in the coming months.