Will the Latest Tesla Electric Vehicle Price Cuts Be Enough?

• Tesla lowers prices for three of its models by $2000 in the most recent round of price cuts as it battles diminishing demand for its EVs.
• The automaker has recently made the decision to lay off more than 10% of its workforce, shortly after launching deliveries of the Cybertruck.
• Tesla is now facing several competitors in its segments, amid an observed industry-wide decline in demand for EVs.

Over the past 12 months Tesla has been mostly slashing prices on its vehicles, taking part in what has been described as a price war in several markets with other EV manufacturers.

But the EV maker isn’t done cutting prices just yet.

Tesla has lowered prices for most of its lineup, including the Model S, Model Y, and Model X by $2000. Among other things, this has lowered the price of the Model Y to $44,380, prior to various federal and state incentives.

The only model that hasn’t benefitted from the latest round of price cuts is the Model 3.

Tesla has also lowered the price of the so-called Full Self-Driving system for the second time in recent months, dropping it by a $2000 increment.

This has brought the one-time purchase price of the driver-assistance suite to $8000, after Tesla had also cut the monthly subscription price of the system in half, from $199 to $99 per month.

Why is Tesla feeling so generous?

The short answer is a likely concern over waning demand for its vehicles, amid a wider worry over slowing growth in demand for EVs that has been observed for about a year and a half. This softening of demand has already seen some drastic measures from Tesla and other automakers that have included dramatic production cuts of some models, as well as personnel layoffs.

And it hasn’t been confined to makers of more affordable EVs. Lucid Motors has been working to reenergize sales via its own series of price cuts.

But in Tesla’s case, it has also raised prices in recent months as well.

On April 1 Tesla raised the price of the Model Y by $1000. So the new price cut is the latest in a series of sudden adjustments that haven’t been going solely in one direction, and not all adjustments will be appreciated by those thinking about ordering a car.

Tesla is also facing a number of more complex, longer-term issues such as an aging lineup, a series of investments in new manufacturing facilities overseas, and a shrinking market share in the EV sphere as automakers from China continue to gain ground in several key markets, including Europe.

The EV maker has also just laid off its entire marketing team.

And it is approaching something of a reckoning over its lineup of SAE Level 2 driver-assist systems. Despite CEO Elon Musk’s repeated prognostications, Tesla has not “solved self-driving,” or allowed owners to rent their cars out as robotaxis with up to $30,000 in annual profits, as once predicted.

Tesla has just seen the first full quarter of Cybertruck deliveries, which has already been dinged by a scary recall for an accelerator pedal that could become dislodged, potentially creating a risk of unintended acceleration.

Tesla has issued a short-term fix in the form of a rivet to be driven through the pedal cover. But this kind of error, even if it affects a little under 4000 units delivered thus far, is unhelpful to Cybertruck sales. It remains to be seen whether it can generate steady demand for its unconventionally styled truck, after fulfilling the first rush of orders from those who had been waiting for the model for years, or convert repeat truck buyers to EVs.

Will the latest round of price cuts be enough to reenergize Tesla sales, or are wider trends pulling EV sales in another direction for all EV makers? Let us know what you think.

Jay Ramey grew up around very strange European cars, and instead of seeking out something reliable and comfortable for his own personal use he has been drawn to the more adventurous side of the dependability spectrum. Despite being followed around by French cars for the past decade, he has somehow been able to avoid Citroën ownership, judging them too commonplace, and is currently looking at cars from the former Czechoslovakia. Jay has been with Autoweek since 2013.