Tesla cut EV prices in the U.S., China and Europe over the weekend, as well as slashing the price for Full Self-Driving. They are the latest pricing strategy shifts by the struggling EV giant. TSLA stock fell solidly early Monday after diving last week.
Meanwhile, Tesla CEO Elon Musk postponed a trip to India.
Tesla Cuts U.S. EV Prices
The Model Y now starts at $42,990 before incentives and excluding taxes and fees. The Model S entry price is $72,990 while the Model X starts at $79,990. The Model Y and Model X are eligible for IRA credits of $7,500.
Tesla Cybertruck and Model 3 prices were left unchanged, with production of both EVs still low.
The Model Y list price is now back to its lowest ever. For much of February, Tesla offered a temporary discount of $1,000, bringing the price to $42,990. After the discount ended, Tesla said that prices would rise by additional $1,000 on April 1, which did happen.
However, in the past week Tesla largely eliminated Model Y inventory discounts, which reached 10% off the list price in some cases. There are still some slight discounts on demo cars.
So, effectively, Tesla Model Y prices are still substantially higher than they were just a few days ago.
Tesla Slashes FSD Price To $8,000
Also on Saturday, Tesla cut the price of its Full Self-Driving service to $8,000 from $12,000. In September 2023, Tesla cut the FSD price from a peak $15,000.
Despite its name, Full Self-Driving is not full self-driving. It's a Level 2 system that requires a human driver to be paying attention and ready to take over at any time.
On April 12, Tesla cut the subscription price for FSD to $99 a month from $199, aiming to spur wider adoption. But it also reduced the incentive to actually buy FSD. At $99 a month, it would take just over 10 years to pay $12,000 in FSD subscription fees. It would still take nearly seven years to pay $8,000.
The FSD price cut comes as Elon Musk puts even more emphasis on autonomous driving for Tesla's future growth, recently announcing plans for a robotaxi unveiling on Aug. 8.
Tesla China Prices Cut
Tesla cut China prices on the Model Y and 3 by 14,000 yuan ($1,972) on Sunday Chinese local time.
The entry Model Y price is now 249,900 yuan ($35,194), down from 263,900 yuan.
The base Model 3 is 231,900 yuan ($32,659).
The Model S in China now starts at 684,900 yuan ($96,457), down 15.3%, with the entry Model X at 724,900 yuan ($102,090), down 19.4%. The Model S and X Plaid variants were slashed 21%-22%. The Model S and X are imported from the U.S.
On April 1, Tesla China had hiked the Model Y price by 5,000 yuan. That also came as several incentives expired. But a few days later, Tesla China began offering 0% interest loans on its EVs. That arguably more than offset the lost incentives as well as the short-lived 5,000 yuan increase for the Model Y.
Tesla faces extreme pressure in the China market, where rivals are rolling out new and refreshed models with advanced features and lower prices.
Li Auto slashed prices on its current lineup. While not competing with Tesla much directly, the once-hot EV maker has struggled in 2024 amid a disappointing demand for its new Mega minivan as well as competition from Huawei-backed Aito and others.
Model 3 Prices Cut In Europe
The EV maker cut Model 3 prices on Sunday in Germany, France, Norway and the Netherlands — three major Tesla markets in Europe — by roughly 4%-7%, or $2,000-$3,200.
A few days earlier, Tesla offered low or zero interest loans in several European countries, including Germany.
Tesla Plunges With One Big Question For The Earnings Call
Elon Musk's Passage To India Delayed
Musk postponed a Sunday-Monday trip to India, which was going to include a meeting with Indian PM Narendra Modi. "Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year," Musk said on his social site X on Saturday.
That delay comes amid fresh reports that Musk is going to announce plans for a Tesla factory in India. An India plant would let Tesla bypass hefty auto tariffs. But without a cheap EV, it's unclear how much demand there would be in India, which has limited charging infrastructure.
So Musk canceling the India trip is another sign that a small EV isn't coming for several years.
Tesla Strategy In Focus
Last week Tesla announced plans to lay off more than 10% of its global workforce.
Tesla's recent price hikes and discount cuts appeared to be an effort to boost margins even at the expense of sales, which already fell sharply in the first quarter. But the weekend moves signal Tesla concerns that demand was falling too rapidly, or simply ongoing whipsaw decision-making on pricing.
All this comes ahead of Tesla earnings on Tuesday evening, with the conference call in focus. Investors will want to know what is Tesla's strategy for reviving growth. Most of all, will Musk confirm that Tesla is shelving a low-cost EV for years to come, prioritizing development of a robotaxi?
Tesla Stock
Shares fell more than 4% early Monday.
Tesla stock plunged 14% to 147.05 last week, diving to its worst levels since January 2003.
Meanwhile, LI stock sold off early Monday, down nearly 9%. Shares plunged 10.2% last week to an 11-month low.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
