China’s EV war: Tesla slashes prices of Shanghai-made electric cars to keep its lead over rivals after record deliveries
- The Model 3 was marked down by 5 per cent to 265,900 yuan, while the Model Y sports-utility vehicle (SUV) was cut by 8.8 per cent to 316,900 yuan, Tesla said
- To attract buyers, Tesla offered subsidies of up to 7,000 yuan if they bought insurance from Tesla’s partners between October 1 and December 31
Tesla slashed the prices of two electric vehicle models rolling out of its Shanghai Gigafactory, as it moved the Model 3 and Model Y down the price range to stay ahead of local competitors after a 30-per cent expansion in production capacity.
The entry-level Model 3 was marked down by 5 per cent to 265,900 yuan, while the starting price of the Model Y sports-utility vehicle (SUV) was cut by 8.8 per cent to 316,900 yuan (US$43,720), Tesla said, effective immediately. The Model Y’s long-range edition would be 9.4 per cent cheaper, at 357,900 yuan.
“In the face of new models launched by its Chinese rivals, price cuts will effectively enhance the competitiveness” of Tesla’s models, said Shanghai Mingliang Auto Service’s chief executive officer Chen Jinzhu, who added that the price cuts were expected after Tesla boosted its local production by 30 per cent.
The discounts, the first by Tesla in mainland China this year, came hot on the heels after the carmaker expanded the production capacity of its Giga Shanghai assembly at the Lingang Free-Trade Area by 30 per cent to 1 million vehicles a year. The sales leader among as many as 500 EV brands in China, Tesla is fighting local rivals such as Nio, Xpeng and Li Auto, which are all going up the value chain to sell higher-price premium EVs in the world’s largest electric-vehicle market.
Nio’s ET5, priced at 328,000 yuan, now costs 23 per cent more than Model 3, and is offered as a high-end EV, equipped with a solid-state battery, and a digital cockpit package complete with augmented reality (AR) and virtual reality (VR) systems.
Li Auto’s L9, with the maximum driving range of 1,315 kilometres (817 miles) on a single charge, sells for 459,800 yuan, 45 per cent more than the entry-level edition of Tesla’s Model Y.
To attract buyers, Tesla has offered subsidies of up to 7,000 yuan if they bought insurance from Tesla’s insurance partners for their Model 3s and Model Ys between October 1 and December 31. Anecdotally, online orders jumped, requiring many buyers to wait before they could access Tesla’s website.
Tesla’s September deliveries rose 8 per cent from the previous month to a record 83,135 units, helped by its expanded capacity and the resumption in production after Shanghai’s two-month lockdown ended in June.
By comparison, Tesla’s Chinese rivals were grappling with delivering 10,000 vehicles per month.
Tesla’s Shanghai plant lost about 50,000 units in production between March 28 and April 18, when the city was placed under total lockdown. But its total loss could amount to 70,000 units, because a broken supply chain foiled Tesla’s attempts to fully restore capacity even after it restarted operations on April 19.