Monitoring Desk
ISLAMABAD/SHANGHAI: Tesla Inc. made its second price cut in less than three months in China on Friday amid surging competition and falling demand in the world’s largest auto market.
The starting price for the locally-built Model Y sports utility vehicle has been lowered to 259,900 yuan ($37,875) from 288,900 yuan, according to the company’s Chinese website.
That’s a record low for China and 43 per cent cheaper than the $65,900 starting price listed on Tesla’s US website. Meanwhile, the Model 3 went down to 229,900 yuan from 265,900 yuan, about 30 per cent cheaper than that in the US.
Tesla’s domestic sales in China dropped 30% in Nov-Dec 2022
Reduced sales in China — a huge market for electric vehicles filled with high competition — is being considered the primary reason behind the sharp price cuts. Tesla’s domestic sales in the country dropped around 30 per cent between November and December 2022, according to JPMorgan. The situation in the country may further worsen before it gets better, the bank’s analysts said in a note to investors in January.
In December, deliveries of Tesla’s China-made cars fell to their lowest level of 55,796 in five months, as it reduced output and cut down prices to deal with rising inventories, according to industry association data.
Tesla’s move of slashing down prices was also influenced by China’s recent decision to end a more than a decade-long subsidy for electric vehicle purchases.
Tesla rolls out Model S, X in China
Tesla is all set to launch the Model S and Model X in China as it announced their prices on Friday, with deliveries to begin in the first half of the ongoing year. They haven’t come to China since Tesla shut down production in January 2021 to refresh the models.
Tesla has been only delivering the vehicles in North America over the past two years amid difficulties in ramping up production after the design update.
