Tesla's recent decision to slash prices on three of its vehicle models in the United States reflects the challenges facing the electric car manufacturer, led by CEO Elon Musk. The price cuts, announced late Friday, affected the Model Y, Model X, and Model S, with reductions in the starting prices.

The Model Y, Tesla's popular small SUV and the top-selling electric vehicle in the U.S., now starts at $42,990. Meanwhile, the Model S and Model X, older and higher-end models, saw their starting prices drop to $72,990 and $77,990, respectively. The move is seen as an effort to attract more car buyers amid increased competition and a decline in Tesla's stock price, which recently fell below $150 per share, wiping out gains from the past year.

Elon Musk highlighted the affordability of Tesla vehicles, stating on social media platform X (formerly known as Twitter) that the entry-level Tesla's cost could be as low as $29,490 after factoring in federal tax credits and savings on gas.

There has been anticipation among industry analysts for Tesla to introduce a small electric vehicle priced around $25,000, referred to as the Model 2. Recent media reports suggested that Musk might cancel the project, adding to uncertainty about Tesla's future plans. However, Musk dismissed these reports as untrue.

Tesla's recent developments also include a workforce reduction of 10% globally, affecting approximately 14,000 jobs. Additionally, the company issued a recall for nearly 4,000 2024 Cybertrucks due to a potential issue with the accelerator pedal, raising safety concerns.

Elon Musk's planned trip to India to meet Prime Minister Narendra Modi was postponed due to "very heavy Tesla obligations," with Musk expressing hope to reschedule the visit later in the year.

Tesla is set to announce its first-quarter earnings on Tuesday, following a decline in worldwide sales during the quarter. Factors contributing to this decline include increased competition, slower growth in electric vehicle sales, and previous price reductions that failed to boost buyer interest. This marks Tesla's first year-over-year quarterly sales drop in almost four years, underscoring the challenges the company faces in a rapidly evolving market.