Tesla cuts prices in the US, China and Germany as competition heats up

Tesla cuts prices in the US, China and Germany as competition heats up

Tesla has announced aggressive price cuts in China and Germany, shortly after cutting prices in the United States, as the world’s largest electric vehicle (EV) maker faces declining sales and growing competition in key markets.

On Sunday, the EV giant cut the starting price of four models sold in mainland China, its largest overseas market, by 14,000 yuan ($1,932). Model Y, the company’s best-selling car in the country, now starts at an all-time low of 249,900 yuan ($34,502).

In Germany, Tesla’s biggest market in Europe, the price of its rear-wheel drive Model 3 has also been cut by 2,000 euros ($2,132) to 40,990 euros ($43,707), according to its official website.

The first cuts were announced on Friday in the US, when Tesla slashed the prices of three of its five models. Prices for the Model Y, Model X and Model S were cut by $2,000 each, while prices for the Model 3 and Cybertruck remained unchanged.

The flurry of cuts comes during a difficult time for Tesla. Its shares have plunged more than 40% year to date, after it reported a decline in quarterly shipments for the first time in nearly four years and announced job cuts equivalent to more than 10% of its global staff.

On Saturday, Tesla CEO Elon Musk said he had postponed his planned trip to India, citing “very heavy” obligations at the company. He was due to arrive in the country this week for a visit expected to include a meeting with Prime Minister Narendra Modi and confirmation that Tesla will build a factory in the world’s most populous country.

China is getting harder
In China, the world’s largest EV market, Tesla’s price cuts are expected to exacerbate an existing price war in a highly competitive sector. On Monday, Chinese EV maker Li Auto (LI), led by billionaire entrepreneur Li Xiang, responded by announcing it was cutting the prices of all four models with immediate effect. Its Li Megane, said to be the world’s largest passenger EV, is now on sale for 30,000 yuan ($4,142) cheaper.

The American company is already facing stiff competition there.

Tesla was narrowly edged out by China’s BYD as the world’s best-selling EV brand in the fourth quarter of last year. Compared to Tesla, BYD cars are more affordable.

The entry-level model is sold in China for the equivalent of just under $10,000. By contrast, Tesla’s Model 3, its cheapest model, now costs three times as much at 231,900 yuan ($32,017) in China following Sunday’s price cut.

China’s EV price war began in October 2022, when Tesla cut prices to boost sales as consumers cut spending in a slowing economy. Almost all major manufacturers, including gasoline vehicle makers, followed suit, impacting the overall profit margins of the auto industry.

Competition continues in 2024, with more than 30 major automakers announcing further price cuts.

On Friday, XPeng, the Guangzhou-based EV maker, said it would offer subsidies worth 500 million yuan ($69 million) to buyers who buy four of its models.

In March, BYD dropped the starting price of its most affordable EV, the Seagull hatchback, by 5% to 69,800 yuan ($9,670). Later that month, Xiaomi, the smartphone manufacturer, joined the EV race by launching the SU7 sedan to take on Tesla.

About Kepala Bergetar

Kepala Bergetar Kbergetar Live dfm2u Melayu Tonton dan Download Video Drama, Rindu Awak Separuh Nyawa, Pencuri Movie, Layan Drama Online.

Leave a Reply

Your email address will not be published. Required fields are marked *