WionDrive News Desk 
US EV giant Tesla faces sluggish first-quarter deliveries due slowdown and soft demand in China. The company’s boost from its price cuts is no more helping and the automaker grapples with strong competition for buyers in a slowing electric-vehicle market. Additionally, the aggressive price war among rivals is making it more difficult to retain customers. Tesla, which became one of the world’s most valuable automaker, is bracing for a slowdown in 2024.
Tesla has been slow to refresh its aging models while high interest rates have sapped consumer appetite for big-ticket items. Additionally, rivals like Xiaomi and BYD are rolling out cheap models in China, the world’s largest auto market. “Tesla may be witnessing price-cut fatigue with consumers and may be testing profitability levels that the company may not find acceptable,” Morgan Stanley analyst Adam Jonas said in a report. “Such conditions may not significantly improve near-term given the age of Tesla’s product line-up.”
All these expectations have led to Tesla’s shares going down nearly 30% so far this year, making them the worst performer in the S&P 500 index. The carmaker is expected to deliver 458,500 vehicles in the quarter ending March 31, according to 17 analysts polled by Visible Alpha. This figure is higher than the 422,875 units it handed over in the same quarter last year, however, it would mark a decline of more than 5% as compared to the previous three months.
Due to aggressive price war in China since late 2022, Tesla CEO Elon Musk has been slashing prices at the expense of margins. Though this is helping boost sales but frustrating many of its customers who have seen the value of their cars slump. However, Elon Musk’s take on this is that price cuts are needed to keep factories humming while he is blaming winter and high borrowing costs for dwindling demand.
Tesla continued its price cuts early this year in the United States, China and Germany, while boosting discounts and incentives to drive demand. For example, Tesla offers more than USD 7,000 discounts on some new Model Ys in the US. “Teslas have the dubious honour of being the fastest-depreciating vehicles in the US,” HSBC said in a report.
