Monday, 17 June 2024
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China is Tesla’s largest EV market, but sales there are declining

  • Tesla has lowered the beginning price of its Model 3 sedan and Model Y sport utility vehicle in China.
  • The Model Y sport utility vehicle’s starting price was slashed by 2.8% to 258,900 yuan from 266,400 yuan.
  • With just the Model 3 and Model Y for sale, Tesla has been enticing customers with price reductions.

Tesla has lowered the beginning price of its Model 3 sedan and Model Y sport utility vehicle in China, possibly paving the way for additional price reductions when the growth of the largest electric car market in the world slows down overall.

The Model Y sport utility vehicle‘s starting price was slashed by 2.8% to 258,900 yuan from 266,400 yuan, while the base Model 3 sedan’s starting price was reduced by 5.9% to 245,900 yuan (S$46,080).

Tesla’s EV market

Given that the US manufacturer was the catalyst for an extended period of price reductions that compressed industry-wide profit margins in January 2023, this action may further put pressure on Tesla‘s competitors to cut pricing.

Through 2023, local automakers like Xpeng and BYD as well as international automakers like Volkswagen were compelled to lower their prices to maintain their market positions; just a third of local automakers were able to eventually reach their annual sales targets.

China’s market for electric vehicles is expected to contract for a second year in 2024 as dismal consumer confidence results from the country’s erratic economic recovery from the epidemic.

The number of battery-electric and plug-in hybrid vehicles being sent to dealers is expected to rise to 11 million units this year, up from 36% in 2023 and 96% in 2022. With just the Model 3 and Model Y for sale, Tesla has been enticing customers with price reductions more and more.

In 2023, dramatic price cuts as automakers tried to stay competitive culminated in May when roughly 900 automobile variations had their price dropped by more than 5% in the prior three months. Even while the markdowns have decreased considerably since then, they are still higher than they were during the previous two years.

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