Tesla’s 13% price promotion in mainland China is less than two months in March, and the Model 3 is only sold for 230,000

Tesla (Tesla, USA: TSLA) has cut prices twice in less than 3 months in China. Domestic prices for the Model 3 and Model Y fell more than 13% and 10%, respectively. The starting price of the former is only 230,000 yuan (RMB ．The same below), the cheapest ever. The price cuts this time come as Tesla’s shipment volume in China hit a five-month low. Market analysis showed that Tesla hopes to use the price cut to grab market share at the order to deal with the overcapacity of the Shanghai factory.

The flattest price reduction in Japan, South Korea and Australia

Tesla, which slashed the prices of rear-wheel drive versions of the Model 3 and Model Y in mainland China by about 50% and 9%, respectively, in late October last year, announced another price cut on Friday ( 6). The starting price of the rear-wheel drive version of Model 3 dropped from the original 265,900 yuan to 229,900 yuan, a decrease of 13.5%; the starting price of the rear-wheel drive version of the Model Y also dropped from 288,900 yuan to 259,900 yuan, a 10% reduction.

Tesla also announced that the new Model S and Model X prices start at RMB 789,900 and RMB 879,900, respectively.

Not only did it lower the price in China this time, Tesla also announced that it will lower the price of Model 3 and Model Y in Japan, South Korea and Australia. After two price cuts, the starting prices of the Model 3 and Model Y rear-wheel drive versions in China also saw a cumulative reduction of approximately 18%. In fact, in addition to the official price reduction, Tesla China has also provided buyers with time-limited insurance subsidies and time-limited delivery incentives from time to time in the fourth quarter of last year, and indirectly granted short-term discounts on the prices of exchange for sales.

I look forward to digesting the excess capacity of the Shanghai plant

Tesla’s new price cut in a short period of time is said to be aimed at boosting sales and market share in order to digest the excess capacity of Tesla’s Shanghai Gigafactory. According to December new energy passenger car data released by the China Passenger Federation, Tesla delivered just 55,796 vehicles last month, the lowest in five months, with year-over-year and month-on-month declines of 21 percent and 44.4 percent, respectively. . The company’s Shanghai plant produced more than 710,900 units last year, accounting for 54% of its global sales last year. However, Tesla’s global shipment volume in 2022 will only increase 40% year-on-year, which is lower than the original annual growth target of 50%.

In addition, according to overseas sources citing sources, the Tesla plant in Shanghai had temporarily suspended production from the end of last year to the beginning of the year, and the plant will be closed again from January 20 to 31. The deal was alleged to be related to production line upgrades and slowing consumer demand, but Tesla has previously responded that the news wasn’t entirely accurate, noting that the plant is carrying out annual maintenance work on the line. of production as planned and production lines such as charging cells have not stopped production.

For Chinese automakers, Tesla’s price cut is bad news for the already highly competitive new energy vehicle market on the continent. China’s 13-year subsidy for new energy vehicles expired late last year, adding to the challenges facing the industry.

Wei Xiaoli and other EV stocks plummeted across the board

News of Tesla’s price cut this time triggered a general decline in Mainland electric car shares on Friday: Xpeng (09868), Ideal (02015), Leap (09863) and Weilai (09866) were down about 4% to 7%, BYD (01211) also fell about 2.6%.

The main continental automakers have different reactions to the subsidy withdrawal: BYD and SAIC Volkswagen have chosen to raise prices and pass on some of the cost increase to customers, while the guide price remains unchanged. Tesla announced a price cut as some Chinese rivals hiked their prices.

In addition, the China Automobile Manufacturers Association estimates that sales of new energy vehicles on the mainland last year rose 90% year-on-year to 6.7 million. Overall auto sales for the year increased 1.7% year over year to 26.757 million units.