Tesla cuts vehicle prices in China for the second time in 3 days amid fears of an accelerating price war

Tesla reduced the price of Model S sedans and Model X sport utility vehicles two days after marking down the Long Range and Performance versions of the Model Y SUV

The move may further accelerate a price war in the world’s biggest auto market, and put pressure on premium carmakers such as BMW and Mercedes-Benz to follow suit

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Consumers look at the Tesla Model X Plaid car at Vanke Mall on February 26, 2023 in Hefei, Anhui Province of China. Photo: Getty Images

Published: 7:47pm, 16 Aug 2023Updated: 7:50pm, 16 Aug 2023

Tesla made its second round of price cuts in China this week, further fuelling concerns the carmaker is reigniting a price war.

The company reduced the price of Model S sedans and Model X sport utility vehicles in inventory by as much as 70,000 yuan (US$9,600) to 754,900 yuan and 836,000 yuan respectively, according to a statement published on its official WeChat account on Wednesday.

The move comes just two days after Tesla marked down the Long Range and Performance versions of the Model Y SUV by 14,000 yuan and extended an insurance subsidy for the base version of the Model 3 sedan, keeping the perk in place through the end of next month.

The cuts may further accelerate a price war in the world’s biggest auto market, and put pressure on premium carmakers such as BMW and Mercedes-Benz Group to follow suit. In addition to the discounts, other incentives including free fast-charging credits and trials of Tesla’s enhanced Autopilot system for referrals remain in place.

Workers work at the Tesla Gigafactory in Shanghai, east China, May 12, 2023. The Yangtze River Economic Belt is an important gathering place for the automobile industry, bringing together a large number of automobile brands and manufacturers, which helps China’s new energy vehicle industry move to a new stage of large-scale and global development, and also adds new impetus to the high-quality development of the Yangtze River Economic Belt. Photo: Xinhua

Tesla shares fell 1.3 per cent at the start of premarket trading Wednesday. The stock has dropped 20 per cent since Chief Executive Officer Elon Musk warned of the potential for further price cuts during the carmaker’s July 19 earnings call.