Elon Musk could start earning less money, because the Tesla company has decided to reduce the prices of the best-selling electric cars by $2,000: Model Y, Model S and Model X.
The reason? This measure was implemented after the Tesla company recorded a low level of sales during the first quarter of 2024 and this contributed to an increase in car inventory.
Currently the cheapest version of the Model Y, it is a medium-sized SUV, is around $42,990 in the United States and this was the initial price of the vehicle. While the price of Model X, the SUV that offers the highest performance, is also sold at the lowest price in its history. Even the Tesla brand also reduced the prices of the most expensive versions of the Model Y by $2,000.
Unfortunately, the measure applied to the prices of Tesla’s electric cars could also affect workers, since Elon Musk announced that he will reduce the number of employees by more than 10 percent worldwide. Even two top executives have also already left.
To address this problem, Tesla will ask shareholders to vote on a new compensation package equivalent to $56 billion for Musk that had already been annulled by a Delaware court at the start of the year.
In the first quarter of the year, the Tesla company managed to sell a total of 386,810 electric vehicles, however, this figure is well below specialists’ estimates. It is the first drop in sales that has occurred two years in a row since the start of the COVID-19 pandemic.
In addition, the Tesla company is facing a negative streak, because its shares have fallen more than 40 percent so far this year; amid concerns about falling sales, intensifying competition in China and Musk’s risky plan to promote autonomy.
How did BYD manage to dethrone Tesla in such a short time?
The main fighters for electric cars are Tesla, which was recently surpassed by BYD, a Chinese company that fully entered the business a little over two years ago.
In the fourth quarter of last year, BYD or Build Your Dreams, sold more cars than Tesla, which has been a leader in the industry for years, with 526,409 units of the Chinese company out of the 483,173 deliveries made by the renowned brand. Elon Musk.
For the first quarter of this year, both companies slowed down; However, the fight continues strong for the ‘throne’ of electric vehicles. But this contest is not only between Tesla and BYD, but the governments of the United States and China also contribute to help their respective industries.
BYD, for example, recently received nearly $3.7 billion from the Chinese government with the goal of continuing its global leadership. Meanwhile, the United States, which is coming from a crisis due to strikes in the automotive sector last year, plans to implement a series of measures to prevent the arrival of BYD and other Chinese cars to its market.
The factors why BYD ‘is taking over other car companies’ are several, and with its possible arrival in Mexico and expansion throughout Europe it puts the giants that dominated the market on alert, while the world makes the transition towards electric cars.
