Tesla Inc. made another round of price cuts on its Model 3 and Y electric vehicles in China on Friday, while also introducing its higher-end Model S sedan and Model X to get a better hold on the premium end of the world’s biggest EV market.
The starting price for the locally-built Model Y sports utility vehicle has been slashed to 259,900 yuan ($37,875) from 288,900 yuan, according to the company’s Chinese website. That’s a record low for China and 43% cheaper than the $65,900 starting price listed on Tesla’s US website. The Model 3 goes to 229,900 yuan from 265,900 yuan, about 30 per cent cheaper than in the US.
Tesla already cut prices in China last year to boost sales as competition heats up in both the mass and premium segments, with the likes of Warren Buffett-backed BYD Co., Xpeng Inc. and Nio Inc., as well as international players such as Porsche AG and Mercedes Benz Group AG, all vying for sales.
Tesla said its newly introduced Model S, with a redesigned interior, is priced at 789,900 yuan in China, while the Plaid version “- Tesla’s fastest car, taking only 2.1 seconds to go from zero to 100 kilometers (62 miles) per hour “- will be sold from 1.01 million yuan. The Model X SUV is priced from 879,900 yuan and the Model X Plaid starts at 1.04 million yuan. Deliveries will begin in the second quarter this year, Tesla said.
Austin, Texas-based Tesla is a dominant player in China’s mass-market EV sector “- vehicles that cost no more than 300,000 yuan. The company localized production of Model 3 sedans at the end of 2019 when it opened a factory in Shanghai capable of churning out 450,000 cars a year. It started shipping Model Ys from there in January 2021.
Tesla shipped over 710,000 vehicles from Shanghai in 2022, representing about 54% of its worldwide sales. But deliveries slowed in December as production was suspended for equipment upgrades and demand ebbed. Tesla announced earlier this week that global deliveries were lower than expected for a third-straight quarter, prompting a 12 per cent slump in its share price Tuesday.