Tesla has cut prices of its cars in its major markets as it faces slower sales and stiff competition from rival electric car makers.

Reuters reported that the company has decided to cut prices in major markets across the world including China and Germany following earlier cuts to its prices in the US. Tesla knocked $2,000 off the prices of three of its five models in the US at the end of last week. Prices of the Model Y, Model X and Model S vehicles in the US were reduced by $2,000 on Friday.

“Tesla prices must change frequently in order to match production with demand,” Tesla CEO Elon Musk posted on X (formerly Twitter) on Sunday (21 April).  “Other cars change prices constantly and often by wide margins via dealer markups and manufacturer/dealer incentives. Only a fool thinks the ‘MSRP’ is the real price,” he posted.

Reuters reported that Tesla cut the starting price of the Model 3 in China by 14,000 yuan (just under $2,000). Tesla has been aggressively cutting prices in China where it faces strong competition from local carmakers such as BYD.

Tesla has been through a period of negative sentiment and bad news in recent weeks.

Tesla reported earlier this month that its global vehicle deliveries in the first quarter fell for the first time in nearly four years. The firm has also recently announced plans for major job cuts.

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Last week it also announced a recall for its Cybertruck over safety concerns, while the Tesla share price has declined by over a third since the start of the year.