Tesla expands price cuts to China, Germany after reducing FSD cost; shares down

April 22, 2024 4:02 AM EDT
(Updated - April 22, 2024 4:50 AM EDT)

Tesla has announced fresh price cuts in several key markets, including China and Germany, days after similar reductions in the United States, as the company continues to struggle amid declining sales and increasing competition in the electric vehicle (EV) market.

The company's shares fell over 3% in premarket trading Monday.

The carmaker reduced the price of the updated Model 3 in China by 14,000 yuan ($1,930) to 231,900 yuan ($32,000) as shown on its official website. In Germany, the price for the Model 3 rear-wheel-drive version was reduced to 40,990 euros ($43,670.75) from 42,990 euros.

Further price cuts were made across various other regions, including Europe, the Middle East, and Africa, according to a Tesla spokesperson.

The move comes after Tesla lowered US prices for the Model Y, Model X, and Model S by $2,000 on Friday.

On Saturday, the EV giant also decreased the cost of its Full Self-Driving (FSD) assistant software to $8,000 from $12,000.

Tesla has been at the forefront of the EV price war, which began over a year ago when it started aggressively cutting prices, impacting profit margins.

The company has been relatively slow in updating its older models amid high interest rates, which have reduced consumer spending on high-value items. Meanwhile, competitors in China, the world's largest auto market, are introducing more affordable models.

Earlier this month, Tesla announced it will lay off over 10% of its global workforce as it prepares for its first annual drop in deliveries.

By Vahid Karaahmetovic

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