Tesla cuts electric vehicle prices in the US, China and Europe in the latest reversal as earnings approach

Tesla (TSLA) cut the U.S. price of the Model Y, Model S and Model It's the latest price flurry by the electric car giant.

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Meanwhile, Tesla CEO Elon Musk has postponed a trip to India.

Tesla reduces prices in the United States

The Model Y now starts at $42,990 before incentives and excluding taxes and fees. The entry price for the Model S is $72,990 while the Model The Model Y and Model X are eligible for $7,500 in IRA credits.

Prices for the Tesla Cybertruck and Model 3 were unchanged, with production of both electric vehicles remaining low.

The Model Y's list price is now back to all-time lows. For most of February, Tesla offered a temporary discount of $1,000, bringing the price to $42,990. After the discount ended, Tesla said prices would rise by an additional $1,000 on April 1, which is what happened.

However, Tesla last week largely eliminated Model Y inventory discounts, which reached 10% of the list price in some cases. There are still some minor discounts on demo cars.

Therefore, Tesla Model Y prices are still much higher than they were just a few days ago.

Tesla prices reduced in China

Tesla cut prices for the Model Y and 3 in China by 14,000 yuan ($1,972) on Sunday local time.

The entry price of the Model Y is now 249,900 yuan ($35,194), down from 263,900 yuan.

The base 3 model is 231,900 yuan ($32,659).

Pricing for the Model S in China now starts at 684,900 yuan (US$96,457), down 15.3%, with the Model Model S and X Plaid models are discounted by 21%-22%. The S and X models are imported from the United States

On April 1st, Tesla China raised the price of the Model Y by 5000. This also came as several incentives were expiring. But a few days later, Tesla China started offering 0% interest loans on its electric cars. This arguably makes up for the lost incentives as well as the short-term increase of 5,000 yuan for the Model Y.

Tesla is facing intense pressure in the Chinese market, as competitors roll out new and updated models with advanced features and lower prices.

Model 3 price reduction in Europe

The electric car maker cut Model 3 prices on Sunday in Germany, France, Norway and the Netherlands — three key markets for Tesla in Europe — by roughly 4% to 7%, or $2,000 to $3,200.

A few days before that, Tesla offered low or no interest loans in several European countries, including Germany.

Tesla is flooded with a big question on its earnings call

Elon Musk's trip to India delayed

Musk postponed his trip to India on Sunday and Monday, which was scheduled to include a meeting with Indian Prime Minister Narendra Modi. “Unfortunately, Tesla's very heavy commitments require postponing the visit to India, but I am very much looking forward to the visit later this year,” Musk said on his X social site on Saturday.

This delay comes amid new reports that Musk was going to announce plans to establish a Tesla factory in India. Establishing a factory in India would allow Tesla to bypass heavy tariffs on cars. But without a cheap electric car, it's unclear how much demand there will be in India, which has limited charging infrastructure.

Tesla's focus strategy

Last week, Tesla announced plans to lay off more than 10% of its workforce worldwide.

Tesla's recent price hikes and discount cuts appear to be an attempt to boost margins even at the expense of sales, which already fell sharply in the first quarter. But the weekend's moves point to Tesla's concerns about demand falling too quickly, or simply making volatile decisions on pricing.

This all comes ahead of Tesla's earnings call on Tuesday evening, with the focus on the conference call. Investors will want to know what Tesla's strategy is to revive growth. Most important of all, will Musk confirm that Tesla will stop producing a low-cost electric car for years to come, while prioritizing the development of a robotaxi?

Tesla shares

Tesla stock fell 14% to 147.05 last week, falling to its worst levels since January 2003.

Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.

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