Tesla is slashing prices in the U.S., China and Germany as the electric vehicle maker battles slowing sales and an increasingly competitive market for EVs. 

In the U.S., the company on Friday cut the prices of three of its five models by $2,000. The new prices are:

• $42,990 for a new Model Y
• $72,990 for a Model S
• $77,990 for a Model X

Prices for the Model 3 and Cybertruck are unchanged at $38,990 and $81,895, respectively.

Tesla didn’t immediately respond to a request for comment on Monday, but CEO Elon Musk addressed the price changes Sunday on social media.

“Tesla prices must change frequently in order to match production with demand,” he said on X, previously known as Twitter. 

The price cut in China — the Model 3 now sells for about $1,930 less — is particularly noteworthy given that Tesla faces stiff competition against more than a dozen electric vehicle rivals there, including Li Auto, Nio and BYD. 

BYD has been lowering its prices, in some cases by as much as 20%, this year to stay competitive in China’s EV market, Reuters recently reported. Earlier this year, BYD toppled Tesla and became the world’s biggest EV seller, Forbes reported.

Tesla is also facing increasing competition in the U.S. as automakers seek to win over consumers with new electric vehicles. Companies including Ford and General Motors have invested billions to produce vehicles that retail for less than Tesla cars. Between 2018 and 2020, Tesla accounted for 80% of EV sales in the U.S., but that figure fell to 55% in 2023, according to Cox Automotive.

“Tesla remains the market leader [in EV sales], but there are just better options out there now,” John Vincent, senior editor for vehicle testing at U.S. News and World Report, told CBS MoneyWatch. 

In Germany, the Model 3 price fell from the equivalent of $43,670 to $42,990. 

Not the first price cuts for Tesla 

Last year, Tesla dramatically lowered prices by up to $20,000 for some models. In March, it temporarily knocked $1,000 off the Model Y, its top-selling vehicle. The reductions cut into the company’s profit margins, which spooked investors.

Tesla’s stock price fell more than 3% in Monday afternoon trading to $142.20 a share. The stock shed more than 40% of its value since year start.

Tesla’s price cuts come at a time when the Texas-based company has faced recalls, layoffs and a sales slump.

Tesla recalled some 4,000 Cybertrucks this month because they have faulty accelerator pedals that may be dislodged when high force is applied, according to the National Highway Traffic Safety Administration (NHTSA). The pedal could become trapped in the interior trim above it, which may increase the risk of collision, NHTSA said.

Tesla is also planning to lay off more than 10% of its roughly 140,000 workers, Musk confirmed in a regulatory filing. That could result in layoffs for about 14,000 Tesla employees by year end.

The company said this month it delivered 386,810 vehicles from January through March, almost 9% below the 423,000 it delivered during the same period last year. Tesla blamed the decline in part on phasing in an updated version of the Model 3 sedan at its Fremont, California factory. 

Plant shutdowns due to shipping diversions in the Red Sea and an arson attack that knocked out power to its German factory also resulted in fewer deliveries, it said. What those fewer deliveries mean to Tesla’s bottom line isn’t yet clear. Tesla is scheduled to report first quarter earnings on Tuesday. 

The next few months are a crucial period for Tesla because investors will be watching to see if Musk can turn around the business going into 2025, Wedbush Securities analyst Dan Ives said last week. 

“For Musk, this is a fork in the road time to get Tesla through this turbulent period otherwise dark days could be ahead,” Ives said in an analyst’s note.