To boost declining sales and cope with fierce competition in the electric vehicle (EV) segment, Tesla has implemented electric vehicle price cuts in several key markets including China, Germany, and the US. This decision was made following a decline in global vehicle sales in the first quarter of 2019, marking the first time in nearly four years. Tesla CEO, Elon Musk, stated that car prices need to be adjusted regularly to match market demand and production.
Tesla initiated an electric car price war over a year ago by aggressively reducing prices despite the impact on profits. As a result, the starting price of the improved Model 3 in China has been reduced by 14,000 yuan to 231,900 yuan and the all-wheel drive Model 3 in Germany decreased from 42,990 euros to 40,990 euros. These new prices also apply to many other countries in Europe, the Middle East, and Africa.
However, Tesla is facing challenges due to rising interest rates and competitors in China launching cheaper electric car models, which is putting significant pressure on the company. As a result, Tesla shares have fallen 40.8% this year, reflecting the difficulties the company is facing.
Despite these challenges, Elon Musk has plans to enter the South Asian market and has postponed his planned trip to India due to being busy at Tesla. It remains to be seen how Tesla will navigate the highly competitive EV segment and continue to innovate in the face of rising challenges.