Tesla Inc has cut prices in China and the US, its two key markets, after disappointing first-quarter sales contributed to swelling inventory.

In China, Tesla lowered prices across its range, with the revamped Model 3 falling to 231,900 yuan ($32,000) from 245,900 previously. The Model Y was discounted to 249,900 yuan — or about $34,500 — from 263,900 yuan. 

In the US, the cheapest version of the Model Y is now $42,990, returning the sport utility vehicle’s starting price to the lowest it’s been. Tesla also discounted the two other more expensive versions of the Model Y by $2,000, and dropped the price of the Model X to its lowest yet.

The cuts cap a wild week for the Austin-based automaker, even by Chief Executive Officer Elon Musk’s standards. It started when Musk announced in a memo to the company’s more than 140,000 employees that he was reducing headcount by more than 10 per cent globally. Two top executives also left.

On Wednesday, Tesla said in its proxy statement that it will ask shareholders to vote again on a $56 billion compensation package for Musk that was voided by a Delaware court in January.

And on Friday, the company recalled almost 3,900 Cybertruck pickups to fix or replace accelerator pedals that can dislodge and cause the vehicle to unintentionally accelerate, increasing risk of a crash.

Then on Saturday, Musk postponed a planned trip to India this week, where he was expected to meet with Prime Minister Narendra Modi, saying he had to deal with “heavy obligations” at Tesla. 

Tesla reports first-quarter earnings on April 23. Its stock is down more than 40 per cent this year on concern about slumping sales, intensifying competition in China and Musk’s risky plan to go “balls to the wall” on autonomy.

The automaker reported its first year-over-year sales drop since the early days of the pandemic, delivering 386,810 vehicles in the first quarter, well short of analyst estimates.

In China, Tesla’s market share shrank to around 6.7 per cent in the fourth quarter of 2023, from 10.5 per cent in the first three months of the year, according to Bloomberg calculations based on China’s Passenger Car Association data.

The automaker recently pared back production schedules at its Shanghai factory, Bloomberg reported late last month. Shipments from its Shanghai plant — which makes EVs for China and for export to other parts of Asia, Europe and Canada — declined in the first two months from a year earlier, even as overall passenger-vehicle sales in China increased.

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