Tesla is slashing car prices following a disappointing first-quarter sales report.

Tesla cut car prices in the US, China, and Europe after sales fell.The company also reduced its software price by a third in the US.The company’s challenges include disappointing delivery numbers, layoffs, and Cybertruck recalls.

Tesla is trying to win back customers with cheaper cars and software.

The electric vehicle maker cut prices in key markets, including the US, China, and Europe, over the weekend, as it faces falling sales and intensifying competition.

The company also slashed the price of its driver-assistance software, Full Self Driving, by one-third, to $8,000 in the US.

The changes come just before the EV manufacturer is set to report first-quarter earnings on Tuesday. Profit margins have fallen dramatically when Tesla has dropped prices in the past.

Tesla lowered prices for most of its US cars, cutting the costs for the Model Y, X, and S by $2,000, Reuters reported.

In the US, the cheapest Model Y and the Model X both SUVs — are being offered at their lowest prices. The best-selling Model Y now starts at $42,990, per Tesla’s website.

The company didn’t change the price for the new Cybertruck or the Model 3 sedan.

“Tesla prices must change frequently in order to match production with demand,” CEO Elon Musk wrote on X on Sunday.

Tesla reported disappointing first-quarter deliveries earlier this month and went through a messy 10% global layoff last week. The company also saw the departure of two key executives, one who oversaw electrical engineering and another focused on business development. On Friday, Tesla recalled nearly 4,000 Cybertrucks because of faulty accelerators.

The recent challenges have caused headaches for Musk, who postponed a planned trip to India to meet Prime Minister Narendra Modi.

He’s also facing a big vote in June on his pay. Musk’s $56 billion pay package was voided by a Delaware judge in January and shareholders will be asked to re-vote on the compensation at the annual meeting, the company said in a statement.

Tesla’s stock is down over 40% year-to-date. Investors are concerned about slow sales amid high-interest rates and intensifying competition from EV makers in China.

Even Musk’s recent announcement to launch a robotaxi in August failed to calm investors last week.

Read the original article on Business Insider

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