Thursday, July 25, 2024

Tesla is slashing prices on cars and FST software over the weekend

(Bloomberg) — Tesla Inc. China slashed prices of its models over the weekend amid slumping sales and a glut of inventory across Europe and the US.

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Late Saturday, the Elon Musk-led company cut the price of its driver assistance software, called FSD, or Full Self-Driving, by a third to $8,000 in the United States. It was $12,000.

The promise of a fully autonomous vehicle has long been key to Tesla's high valuation. In recent weeks, Tesla has released new versions of the FSD software, and Musk has promised to release a dedicated Robotaxis on August 8.

Tesla's website says customers will get 30 days of full self-driving capability with the purchase of a new vehicle. “Currently enabled features require active driver supervision and do not make the vehicle autonomous,” the website says.

Earlier in the weekend, Tesla cut prices in China and the US, its two main markets, as well as in Europe, contributing to inventory swelling after disappointing first-quarter sales.

In China, Tesla slashed prices across its range, with the updated Model 3 dropping to 231,900 yuan ($32,000) from 245,900 yuan previously. The Model Y is 249,900 yuan — or about $34,500 — discounted from 263,900 yuan.

In the US, the cheapest version of the Model Y is now priced at $42,990, making it the lowest starting price for a sport utility vehicle. Tesla also discounted the other two pricier versions of the Model Y by $2,000, and dropped the price of the Model X to its lowest price.

The cuts capped a solid week for the Austin-based automaker. It all started when Musk announced more than 10% of his global workforce in a memo to the company's more than 140,000 employees. Two key executives also left.

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Read more: Tesla senior executives exit amid global job cuts

On Wednesday, Tesla said in its proxy statement that it will ask shareholders to vote again on the $56 billion compensation package for Musk that was struck down by a Delaware court in January.

On Friday, the company recalled nearly 3,900 Cybertruck pickups due to repair or replace accelerator pedals.

Musk also postponed a planned trip to India, where he was expected to meet Prime Minister Narendra Modi, saying he had to deal with “heavy commitments” at Tesla.

Also Read: Musk Postpones India Visit Citing Heavy Tesla Duties

Tesla reports first-quarter earnings on April 23. Its stock has fallen more than 40% this year amid declining sales, intensifying competition in China and Musk's risky plan to go “balls to the wall” for Autonomy.

The automaker posted its first annual sales decline since the early days of the pandemic, delivering 386,810 vehicles in the first quarter, falling short of analyst estimates.

In China, Tesla's market share fell to 6.7% in the fourth quarter of 2023, down from 10.5% in the first three months of the year, according to Bloomberg calculations.

The automaker recently pushed back the production schedule at its Shanghai factory, Bloomberg reported late last month. Exports from its Shanghai plant, which supplies EVs in China and other parts of Asia, Europe and Canada — fell from the first two months of a year ago, even as overall passenger-vehicle sales in China rose.

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