Photo by: David Zalubowski / AP
A 2023 Model X sits outside a Tesla

Tesla implemented a $2,000 price reduction on three of its five models in the United States late Friday, highlighting the ongoing challenges faced by the electric vehicle manufacturer led by billionaire Elon Musk.

The price adjustments affected the Model Y, Tesla’s popular small SUV and the leading electric vehicle in the U.S., as well as the older and pricier Models X and S. However, the prices for the Model 3 sedan and the Cybertruck remained unchanged.

Following these revisions, the starting price for a Model Y now stands at $42,990, while a Model S starts at $72,990, and a Model X at $77,990.

This decision came after Tesla’s stock dipped below $150 per share, wiping out all gains achieved over the past year. The Austin, Texas-based company has witnessed a 40% decline in its stock price this year due to declining sales and heightened competition. Lowering prices is seen as an attempt to attract more buyers.

Elon Musk took to Twitter, formerly known as X, to highlight that factoring in federal tax credits and savings on gas could bring down the entry-level Tesla’s cost to as low as $29,490.

There has been anticipation among industry analysts for Tesla to introduce a small electric vehicle, speculated to be the Model 2, priced around $25,000. Reports suggesting Musk’s intention to cancel the project added to the uncertainty surrounding the company’s trajectory, although Musk refuted these claims.

The price adjustments capped off a challenging week for Tesla, which announced a global workforce reduction of 10%, affecting around 14,000 jobs. Additionally, the company issued a recall for nearly 4,000 of its 2024 Cybertrucks due to a potential accelerator pedal issue that could lead to unintended acceleration and an increased risk of accidents.