Tesla has reduced prices of its premium models in China by more than 4.5%, aiming to increase sales in the largest auto market globally. The price cuts went into effect on Monday and are applicable to all versions of the Model 3 and Model Y, which are popular models of Tesla in China.
The starting price for the Model 3 is now 229,900 yuan ($33,515), while the starting price for the Model Y has been lowered to 259,900 yuan ($37,889).
Tesla’s decision to lower prices comes as it faces growing competition from Chinese electric car manufacturers, including BYD and Xpeng, resulting in a loss of market share in China.
Chinese consumers, who have been affected by rising inflation, are likely to appreciate the price cuts.
Aside from reducing prices, Tesla has also been providing cash subsidies to certain buyers in China, although these subsidies are being phased out gradually.
Tesla is expected to report a 6% increase in its car sales in China during the second quarter of 2023, marking a slowdown compared to the 18% growth experienced in the first quarter.
The decline in Tesla’s China sales can be attributed to various factors, such as heightened competition from local electric car manufacturers and the gradual reduction of government subsidies.
However, the price cuts announced on Monday could assist Tesla in boosting sales in the upcoming months.
