Renowned American electric vehicle manufacturer Tesla has reportedly decreased the price of its Model Y in China by an additional RMB14,000 (approximately $A3,000). Additionally, Tesla has introduced an RMB8,000 insurance subsidy for the entry-level version of the Model 3.
According to CnEVPost, a reliable source for Chinese-language EV updates, Tesla has slashed the prices of the Model Y Long Range and Model Y Performance by RMB14,000, translating to around $A3,000. Consequently, the starting price for the Model Y Long Range now stands at RMB299,900 (about $A63,700), down from RMB313,900 ($A66,700), and the Model Y Performance’s base price has dropped to RMB349,900 (approximately $A74,300) from RMB363,900 ($A77,300).
However, the starting price for Tesla’s basic rear-wheel-drive Model Y in China remains unaffected at RMB263,900 (around $A56,000).
Concurrently, Tesla has initiated a time-limited insurance subsidy of RMB8,000 (about $A1,700) for purchasers of the entry-level Model 3.
All relevant Tesla models are manufactured locally in China at the Tesla Shanghai facility, which means that customers anticipating these lowered prices can still anticipate delivery times ranging from 1 to 4 weeks.
These changes hold significance beyond their financial impact. China is the world’s largest automobile market and the leading electric vehicle market globally, with EV sales accounting for 25 percent and several of its EV manufacturers emerging as dominant global players.
Traditional European and Japanese automakers that once held sway in the Chinese market now find their share and influence greatly diminished. Even automotive giant Toyota recently conceded that the electric vehicle shift jeopardizes its future prospects in China, a trend it had largely overlooked as it focused on hybrids and hydrogen cars.
Tesla’s capacity to reduce prices stems from its cost-cutting measures at the manufacturing level, including its “giga-press” facilities. The company is willing to dip into its robust margins to maintain its substantial lead over competitors and can generate revenue and profits through other avenues such as apps, charging infrastructure, and EV credits.
Observers will be keenly monitoring whether these recent price cuts will extend to other markets, including the US, Europe, and Australia.
This development has already reverberated in the stock markets, with Bloomberg reporting a 2.9 percent drop in Tesla’s stock and other EV manufacturers like Rivian and Lucid also experiencing declines. Main rival BYD from China faced a more than six percent drop in the Hong Kong market as analysts and investors adjusted their margin expectations.
|Please Follow us on Social Media