Tesla Cuts US Prices by $2,000 as Sales Slow, Inventories Swell

(Bloomberg) -- Tesla Inc. cut the price of its best selling Model Y, the Model X and the Model S by $2,000 in the US late Friday after disappointing first-quarter sales pushed up inventory.

The lowest cost version of the Model Y SUV now has a purchase price of $42,990, down from $44,990 previously, before any federal tax credit. Similar cuts were made for the Model S and X. The Model 3 appeared to be unchanged. 

The cuts cap a wild week for the Austin-based electric automaker, even by Chief Executive Officer Elon Musk’s standards. Early Sunday, Musk announced in a memo to the company’s more than 140,000 employees that he was reducing headcount “by more than 10% globally.” Two top executives also departed.

Read More: Tesla Senior Executives Leave in Midst of Global Job Cuts 

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

And on Friday, the company recalled almost 3,900 of its futuristic Cybertruck pickups to fix or replace accelerator pedals that can dislodge and cause the vehicle to unintentionally accelerate, increasing risk of a crash. 

Tesla reports first-quarter earnings Tuesday. The stock is down more than 40% this year on concern about slumping sales, growing competition from China and Musk’s vow to go “balls to the wall” on autonomy.

The automaker suffered its first year-over-year sales drop since the early days of the Covid pandemic in the first quarter, delivering 386,810 vehicles, well short of analyst estimates of 449,080.  

--With assistance from Natalie Choy.

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