Tesla’s China sales jump after heavy price cuts, but intensifying competition, weakening demand cloud outlook

Name: Tesla owners in China protest against price cuts as consumers tighten budgets
Uploaded: 2023-01-18T05:34:55.000Z
Duration: 2 min 1 s
Description: Tesla owners in China protest against price cuts as consumers tighten budgets

Tesla sold 12,654 Model 3 and Model Y vehicles between January 9 and 15, up nearly 80 per cent week on week following the price cuts, according to China Merchants Bank

The company has cut prices of its Shanghai-made cars by nearly 23 per cent in two tranches since late October

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Visitors check out a Tesla Model Y SUV at the electric-vehicle maker’s showroom in Beijing. Photo: Reuters

Daniel Renin Shanghai

Published: 1:34pm, 18 Jan 2023Updated: 1:54pm, 18 Jan 2023

Tesla’s sales in China jumped nearly 80 per cent after the US carmaker slashed prices of the Shanghai-made Model 3 and Model Y vehicles earlier this month, but the discounts might not be enough to revive growth as Chinese rivals follow with price cuts of their own, analysts said.

Texas-based Tesla sold 12,654 Model 3 and Model Y vehicles between January 9 and 15, up 76 per cent from the previous seven days, according to data compiled by China Merchants Bank. However, the figure was 14.5 per cent lower than the same period in 2022.

“The massive price cuts [by Tesla] did stimulate sales,” said Phate Zhang, founder of Shanghai-based electric-vehicle news site CnEVpost. “However, fiercer market competition and weaker demand [for premium electric cars] will make it difficult for Tesla to chase sales growth this year.”

On January 6, Tesla slashed prices of the two models by as much as 13.5 per cent following lacklustre deliveries in December. The discounts followed price cuts of up to 9.4 per cent on October 24. As a result, Tesla’s prices have fallen to their lowest levels since the first vehicle rolled off the Shanghai production line in December 2019.

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Tesla owners in China protest against price cuts as consumers tighten budgets

Tesla’s discounts have triggered a price war in the mainland’s premium EV segment, with its Chinese rivals – Xpeng and Aito, an EV brand backed by telecommunications equipment maker Huawei Technologies – following with price cuts of their own.