Tesla faces challenges with falling sales, price cuts, and increased competition from Chinese electric vehicles.

Challenging Times for Tesla

Chinese electric vehicles pose a significant challenge to Tesla's market dominance, with their low cost and high quality.

Competition from China

Tesla's price cuts and shift towards autonomy raise questions about their ability to compete and regain consumer confidence.

Tesla's Pricing Strategy

The competition in the mass market for electric vehicles will likely be based on price, posing a challenge for Tesla's profitability.

Competition on Price

# World Business Report: Tesla's Challenging Times

## Tesla Slashes Prices in Major Markets

Hello, welcome to World Business Report. I'm Ben Thompson, and we're going to start with those pretty challenging times right now for Tesla. The electric car maker has slashed the price of its cars in some major markets after similar price cuts in the US. The price of its Model 3 was trimmed both in China and Germany by around $2,000. This comes after the EV maker reported a fall in global deliveries for the first time in 4 years in the last quarter.

## Interview with David Bailey

Let's speak to David Bailey, who's professor of business economics at the University of Birmingham. David discusses the challenges Tesla is facing and the impact of competition from Chinese electric vehicles in the market.

- **Competition from China**: Chinese electric vehicles are arriving in Europe and posing a significant challenge to Tesla. The Chinese electric vehicles are not only cheaper but also of good quality, with advanced technology and low production costs.

- **Tesla's Strategy**: Tesla's strategy of aiming for a cheap $25,000 car seems to have been postponed, and they are now focusing more on autonomy. However, investors are not convinced, as Tesla shares have declined by more than 40% since the start of the year.

- **Consumer Confidence**: With the cost of living crisis in many developed economies, consumers may not have the disposable income to afford a Tesla. A price cut may not be enough to win back the confidence of consumers, especially with the increasing competition from Chinese electric vehicles.

## The Future of Tesla

The future of Tesla in the electric vehicle market remains uncertain. The company will need to address the challenges posed by competition and consumer affordability in order to maintain its position in the market.

Stay tuned for more updates on Tesla's quarterly results and the challenges they face in the electric vehicle market. Thank you for reading World Business Report.

"Tesla's Price Cuts and Competition: What's Next for the Electric Car Maker?"

- Tesla has slashed the price of its cars in China and Germany by around $2,000 after a fall in global deliveries
- The company is facing competition from Chinese electric vehicles, which are cheaper and of good quality
- Tesla's strategy of focusing on scale and cost may not be enough to compete with the Chinese
- The cost of living crisis in many developed economies is impacting consumer confidence and Tesla's share price
- The future of Tesla's profitability and competition with Chinese electric vehicles remains uncertain

Tesla has cut its prices in a number of markets – including the US, China, and Germany – as the electric car giant faces falling sales.
 
A price war has been intensifying between electric vehicle (EV) makers, with particularly fierce competition coming from Chinese firms.
 
And Tesla - run by multi-billionaire Elon Musk – reported a sharp fall in global vehicle deliveries in early 2024, and has been forced to recall thousands of its new Cybertruck over safety concerns.
 
Last week, Tesla also announced plans to lay off more than 10% of its global workforce.
 
Read more on the BBC News website: https://bbc.in/3UuMkzH

Subscribe here: http://bit.ly/1rbfUog

For more news, analysis and features visit: www.bbc.com/news 

#Tesla #ElonMusk #BBCNews

I'm Ben Thompson and we're going to start with those pretty challenging times right now for Tesla.

The electric car maker has slashed the price of its cars in some major markets after similar price cuts in the US.

The price of its Model 3 was trimmed both in China and Germany by around $2,000.

Well, all of this after the EV maker reported a fall in global deliveries for the first time in 4 years in the last quarter.

Elon Musk's company has also been grappling with falling sales and a price war in what is the world's largest auto market, China.

Well, Tesla will report its quarterly results later this week.

So let's speak to David Bailey, who's professor of business economics at the University of Birmingham.

We know that Tesla has been struggling to shift these vehicles, but quite a significant cut designed, what assumes to get those sales numbers back up.

Yes, a really difficult quarter for Tesla, a very bumpy road as you just laid out there.

And clearly, the price cut they've done before a year ago really hasn't stimulated sales.

And as it looks at the moment, deliveries for 2024 this year likely to be flat compared to last year.

So a very challenging environment for Tesla.

What's going on is that the EV market globally growth is slowing.

And also lots more competition has arrived, particularly from China, which can make electric vehicles at very low cost.

Yes, and talk to me about that competition.

Because if people are thinking about making a switch, given the cost of living crisis we're seeing in many developed economies around the world, they might think, I'd like a Tesla.

And that competition is really hitting their bottom line, isn't it?

And We're seeing this kind of wave of Chinese cars arrive, particularly in Europe.

So the ports in Europe are full of Chinese electric vehicles that are arriving.

You look at cars like, for example, BYD, very good batteries in them as well.

China has been making electric cars for 25 years.

So that is a massive challenge for Tesla.

And there is a question mark over Tesla's strategy because their strategy has been about scale and cost.

They've been aiming for a cheap $25,000 car.

That seems to have been postponed and they seem to be going more into autonomy.

Yes and investors aren't that convinced that they can do it.

Tesla shares down by more than 40% since the start of the year.

Do you think a price cut is enough to win back confidence of consumers, given, as you said, there's so much competition and people just don't have a lot of money in their pocket right now?

So there's a huge cost of living squeeze that's taken place in many European countries and the UK in particular, Tesla clearly have to cut prices.

And from the point of view of a consumer, electric vehicle prices coming down is great.

But the Chinese could go much, much further.

So there's a question mark about how far Tesla can go on this.

And also, if they go down the kind of robo taxi route that they're saying, which is really kind of propped up their share price, I'm not sure that's going to work.

I think what we're seeing really is the Tesla share price in particular being judged as a carmaker rather than the technology company.

And that's an interesting distinction, isn't it?

And I wonder, though, David, you know what happens next.

Is this a race to the bottom in terms of price?

Because we know Tesla reshaped the market for electric vehicles, it made them desirable.

But ultimately, it will be a competition on price, won't it?

Yes, I think it will be, particularly in the mass market.

Of course, they can differentiate themselves in the premium market, But that's not where the massive sales volume is going to be.

So I think the question is, can Tesla not only reduce its price but also its costs fast enough to continue making profits or are they going to be outcompeted by the Chinese?

David Bailey there at the University of Birmingham, thank you.


Speaker 0: Hello, welcome. This is World Business Report. I'm Ben Thompson and we're going to start with those pretty challenging times right now for Tesla. The electric car maker has slashed the price of its cars in some major markets after similar price cuts in the US. The price of its Model 3 was trimmed both in China and Germany by around $2,000.

Well, all of this after the EV maker reported a fall in global deliveries for the first time in 4 years in the last quarter. Elon Musk's company has also been grappling with falling sales and a price war in what is the world's largest auto market, China. Well, Tesla will report its quarterly results later this week. So let's speak to David Bailey, who's professor of business economics at the University of Birmingham. And David, no great surprise.

We know that Tesla has been struggling to shift these vehicles, but quite a significant cut designed, what assumes to get those sales numbers back up.

Speaker 1: Yes, a really difficult quarter for Tesla, a very bumpy road as you just laid out there. We also saw a recall on the Cybertruck. And clearly, the price cut they've done before a year ago really hasn't stimulated sales. And as it looks at the moment, deliveries for 2024 this year likely to be flat compared to last year. So a very challenging environment for Tesla.

What's going on is that the EV market globally growth is slowing. And also lots more competition has arrived, particularly from China, which can make electric vehicles at very low cost.

Speaker 0: Yes, and talk to me about that competition. Because if people are thinking about making a switch, given the cost of living crisis we're seeing in many developed economies around the world, they might think, I'd like a Tesla. I can't afford 1. I'll go for a cheaper Chinese-made 1. And that competition is really hitting their bottom line, isn't it?

Speaker 1: Very much so. And We're seeing this kind of wave of Chinese cars arrive, particularly in Europe. So the ports in Europe are full of Chinese electric vehicles that are arriving. They're not just cheap. They're also very good quality.

You look at cars like, for example, BYD, very good batteries in them as well. China has been making electric cars for 25 years. They've got scale. They've got experience. They can produce at very low cost.

So that is a massive challenge for Tesla. And there is a question mark over Tesla's strategy because their strategy has been about scale and cost. Can they compete with the Chinese? They've been aiming for a cheap $25,000 car. That seems to have been postponed and they seem to be going more into autonomy.

Speaker 0: Yes and investors aren't that convinced that they can do it. I'm just looking at the numbers. Tesla shares down by more than 40% since the start of the year. Do you think a price cut is enough to win back confidence of consumers, given, as you said, there's so much competition and people just don't have a lot of money in their pocket right now?

Speaker 1: Exactly. So there's a huge cost of living squeeze that's taken place in many European countries and the UK in particular, Tesla clearly have to cut prices. And from the point of view of a consumer, electric vehicle prices coming down is great. That's going to encourage take up. But the Chinese could go much, much further.

So there's a question mark about how far Tesla can go on this. And also, if they go down the kind of robo taxi route that they're saying, which is really kind of propped up their share price, I'm not sure that's going to work. I think what we're seeing really is the Tesla share price in particular being judged as a carmaker rather than the technology company.

Speaker 0: Yeah. And that's an interesting distinction, isn't it? And I wonder, though, David, you know what happens next. Is this a race to the bottom in terms of price? Because we know Tesla reshaped the market for electric vehicles, it made them desirable.

But ultimately, it will be a competition on price, won't it?

Speaker 1: Yes, I think it will be, particularly in the mass market. Of course, they can differentiate themselves in the premium market, But that's not where the massive sales volume is going to be. So I think the question is, can Tesla not only reduce its price but also its costs fast enough to continue making profits or are they going to be outcompeted by the Chinese?

Speaker 0: We will talk about it again, I am sure. David, though, for now, thank you. David Bailey there at the University of Birmingham, thank you.

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Elon Musk's Tesla cuts prices in major markets as sales fall | BBC News