18.1 C
Delhi
Friday, December 2, 2022

Tesla Jumps into Price war with home-grown Chinese EVs

SHANGHAI, Oct 24 – Tesla cut the starting prices of its Model 3 and Model Y cars in China by up to 9%, reversing an industry-wide upward trend amid signs of softening demand in China. the largest car market in the world.

The price cut, posted on the electric vehicle (EV) giant’s Chinese website on Monday, is the first Tesla has implemented in China in 2022 and comes after Tesla last month began offering limited incentives to buyers who opted for its insurance.

Shares of the Austin, Texas-based company fell 3.3% to $207.36 in pre-bell trading.

The price cuts also follow Tesla CEO Elon Musk’s comments last week that China and Europe are in “sort of a recession” and Tesla said it will miss its vehicle delivery target this year.

ADVERTISEMENT

Musk told analysts last week that demand was strong in the current quarter and he expected Tesla to be “recession-proof.”

China Merchants Bank International (CMBI) said Tesla’s price cuts underscored a growing competitive risk for electric car makers in China, with industry-wide sales expected to slow through 2023.

“The price cut underscores the potential price war that we have been highlighting since August,” said Shi Ji, an analyst at CMBI.

Analysts at CMBI warned last week that 2023 would bring more competition to the EV sector, saying it expected sales growth for EVs and hybrids to fall below 50% on a combined basis.

ADVERTISEMENT

Tesla cut prices in China last year in an effort to be more competitive in the country, while in the United States, its biggest market, the electric car maker has raised prices over the past year due to higher raw material costs.

Data on Monday showed retail sales in China rose 2.5% in September, less than an expected 3.3% rise and less than half of August’s 5.4% rise.

The American automaker and several Chinese rivals have raised prices several times since last year due to rising raw material prices. But Tesla regularly adjusts the prices of its cars in China, including discounts to reflect government subsidies.

Tesla told it was adjusting prices in line with costs. Capacity utilization at its Shanghai Gigafactory has improved while the supply chain remains stable despite the impact of strict zero-covid restrictions on China’s economy, leading to lower costs.

ADVERTISEMENT

The starting price of the Model 3 sedan was cut to 265,900 yuan ($36,727) from 279,900 yuan, while the price of the Model Y sport utility vehicle was cut to 288,900 yuan from 316,900 yuan, product prices listed on a Chinese website showed.

Tesla upgraded its Shanghai factory earlier this year, and in September delivered 83,135 electric cars made in China, setting a production record since production began in December 2019. read more

Tesla is now the third best-selling electric car maker in China after BYD Motor and SAIC-GM-Wuling and is the only foreign player in the top 15 list published by China. Automobile Association.

ADVERTISEMENT

Support Us

Secured by Paypal

Related Stories

Check out other tags:

Most Popular Articles