Los Angeles, California – Electric car giant Tesla, led by billionaire Elon Musk, has slashed its prices in major markets like the US, China, and Germany due to declining sales. This move comes amid a fierce price war among electric vehicle manufacturers, with Chinese companies posing significant competition to Tesla.

Tesla is set to announce its financial results for the first quarter of 2024 after the US market closes on Tuesday. In an effort to stimulate demand, the company has reduced the starting price of its Model 3 vehicle in China by 14,000 yuan and lowered prices of other models in the US by $2,000.

The price cuts by Tesla are not limited to a few countries, with reductions seen in many other regions including Europe, the Middle East, and Africa. This aggressive pricing strategy by Tesla was triggered over a year ago, impacting the company’s profit margins as it sought to maintain its market position against increasing competition.

Rivals in China, such as BYD and Nio, have been gaining momentum by offering more affordable electric vehicle options, while Xiaomi, a Chinese smartphone maker, recently entered the EV market with its first electric vehicle launch.

Elon Musk, the CEO of Tesla, recently postponed a planned trip to India where he was scheduled to meet with Prime Minister Narendra Modi due to “very heavy Tesla obligations.” Additionally, Tesla faced a setback when it recalled thousands of Cybertrucks over safety concerns related to the accelerator pedals potentially getting trapped by the interior trim, raising the risk of accidents.

The stock price of Tesla has experienced a significant decline of more than 40% since the beginning of the year, reflecting challenges the company is facing in an increasingly competitive electric vehicle market. The company’s decision to reduce prices in key markets indicates a strategic shift to attract more customers and remain competitive in the evolving industry landscape.