Last Updated on January 6, 2023 by Bitfinsider
Tesla lowered car pricing in China for the second time in less than three months on Friday, igniting a price war in the world’s largest auto market despite a bleak demand forecast.
According to Reuters estimates, the new fall, along with a reduction in October and different incentives totaling up to 10,000 yuan provided to Chinese consumers over the previous three months, amounts to a 13% to 24% reduction in Tesla’s pricing from September.
According to Reuters estimates based on pricing displayed on its website, the US electric vehicle (EV) maker dropped prices for all variants of its Model 3 and Model Y cars in China by 6% to 13.5% on Friday. The starting price of the Model 3 was reduced from 265,900 yuan to 229,900 yuan ($33,427).
“Tesla’s pricing modifications are supported by several engineering advances,” Grace Tao, Tesla’s vice president in charge of external relations in China, said on her Weibo account on Friday. “They respond to the government’s request to stimulate economic development and consumer spending.”
The move comes after Tesla’s China-made car deliveries fell to their lowest level in five months in December, and just days after Beijing withdrew a subsidy scheme that helped establish the world’s largest EV market. Due to dwindling demand, Tesla and its competitors have been forced to bear the burden of that choice.
Tesla had previously only sold the Model 3 and Model Y in China, but the company released prices for the Model S and Model X in China on Friday.
The carmaker’s cuts have dropped Model 3’s beginning price to the same level as BYD’s best-selling Han EV sedan, which starts at 219,800 yuan. After losing central government subsidies, the Chinese EV manufacturer recently upped the cost of its best-selling models.
According to the China Passenger Car Association, sales of BYD’s Han series, including plug-in hybrid variants, were more than double those of Model 3′s in the first 11 months.
According to Reuters estimates, the Model 3 and Model Y car pricing in China are currently 24% to 32% lower than those in the United States, Tesla’s main market, due to factors like as varying material and labor costs.
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