Tesla reduced the prices of three of its five models in the United States late Friday, showing the challenges facing the electric vehicle maker led by billionaire Elon Musk.
The company reduced the prices of the Model Y, a small SUV which is Tesla’s most popular model and the top-selling electric vehicle in the U.S., and also of the Models X and S, its older and pricier models. Prices for the Model 3 sedan and the Cybertruck remained the same.
The cuts brought the starting price for a Model Y down to $42,990 and to $72,990 for a Model S and $77,990 for a Model X.
The move came the day after Tesla’s stock declined below $150 per share, wiping out all gains made over the past year. The Austin, Texas, company’s stock price has dropped about 40% so far this year amid falling sales and increased competition. Discounted prices are a way to attract more car buyers.
Musk posted early Saturday on X, the social media platform known as Twitter before he acquired and renamed it, that the cost of an entry-level Tesla was as low as $29,490 once a federal tax credit and gas savings were factored in.
Industry analysts have been awaiting Tesla to introduce a small electric vehicle that would cost around $25,000, the Model 2. Media reports this month that Musk planned to scrap the project created more uncertainty over the company’s direction, although Musk called them untrue.
The price cuts concluded a challenging workweek at Tesla, which announced Monday that it was reducing 10% of its staff globally, about 14,000 jobs. The company also said it was recalling nearly 4,000 of its 2024 Cybertrucks after discovering the accelerator pedal can get stuck, potentially causing the vehicle to accelerate unintentionally and increase the risk of a crash.
On Saturday, Musk confirmed he had postponed a planned weekend trip to India to meet with Prime Minister Narendra Modi, citing “very heavy Tesla obligations.” He said on X that he looked forward to rescheduling the visit for later this year.
Tesla is set to announce its first-quarter earnings on Tuesday.
The company reported earlier this month that its worldwide sales fell sharply from January through March as competition increased worldwide, electric vehicle sales growth slowed, and earlier price cuts failed to lure more buyers.
It was Tesla’s first year-over-year quarterly sales decline in nearly four years.
Tesla’s recall of about 4,000 Cybertrucks comes after only five months on the market due to a faulty accelerator pedal that can increase the risk of accidents,
Tesla has agreed to fix an accelerator pad on the trucks that the National Highway Traffic Safety Administration says can get stuck.
When high force is applied to the pad on the accelerator pedal, the pad may dislodge, or come lose, causing the pedal to become trapped in the interior trim, according to the traffic safety agency’s report.
Tesla was first made aware of the issue March 31.
The recall includes the pickups that were manufactured from Nov. 13, 2023, to April 2024.
Tesla will change or fix the accelerator pedal for free for the customer.
