Volkswagen offers temporary discounts in China, where the price war in the electric vehicle industry is intensifying, announced Ralf Brandstaetter, a member of the Board of Directors, at the IAA Motor Show in Munich, reports Reuters.
The price war in the electric vehicle industry continues, Photo: Shutterstock
According to the quoted source, Brandstaetter, who is responsible for Volkswagen’s China business, said that the biggest European carmaker launched a massive cost-cutting program for its MEB electric platform last year.
“The first results are materializing now. We have transferred these benefits directly to our customers, for example in the case of the ID.3 electric model. With these significant efforts, we have substantially increased our competitiveness,” Brandstaetter told Reuters, reports Agerpres.
He did not elaborate on the level of discounts in China, but stated that they are temporary.
“Unlike the 50%-60% price reductions of some rivals in China, Volkswagen has adopted temporary marketing measures,” the German group informed.
Volkswagen is facing pressure from some shareholders following exposure to China, particularly regarding the disputed factory in the Xinjiang region. Since 2021, the United States has accused China of “genocide” against the Uighurs in the Xinjiang autonomous region.
Volkswagen will not join the price war
Brandstaetter assured that Volkswagen will not join the price war started by Tesla this year, adding that the German group still makes enough profits from sales of non-electric cars to cope with the situation.
“Profitability is our priority. That’s why we don’t want to sell electric vehicles on the market at any price,” said the VW official.
Volkswagen expects to deliver about 9.5 million vehicles in 2023, up from 8.26 million vehicles last year. Revenues are also expected to be 10% to 15% higher in 2023 than in 2022, suggesting Volkswagen expects sales of 307 to 331 billion euros this year.
In the middle of last month, Tesla again reduced prices on the Chinese market for its high-performance and long-range Model Y versions, Reuters reported.
The move came after sales of China-made Tesla vehicles fell 31 percent in July from June, their first monthly decline since December, as the automaker halted some production to prepare for a launch of an improved version of the Model 3 automobile.
Tesla has reduced the starting prices of both versions of the Model Y by 14,000 yuan ($1,935).
The starting price of Model Y Long Range is down 4.5% to 299,900 yuan, and the starting price of Model Y Performance is now 349,900 yuan, down 3.8%.
In the same announcement, Tesla also said it would offer insurance subsidies in China worth 8,000 yuan between August 14 and September 30 for buyers of entry-level, rear-wheel drive versions of Model 3 vehicles in inventory.
In recent months, Tesla has cut its prices several times in major markets, including the US and China.
The price war in the electric vehicle industry
And Ford Motor joined the price war in the electric vehicle industry in July. The company has cut prices for its F-150 Lightning electric pickup trucks by up to $10,000, saying its efforts to increase production and cut costs for the minerals that go into batteries have paid off.
Reuters said the move comes amid a price war started by Tesla several months ago.
“The Ford Lightning is a good vehicle, just a bit pricey, especially given today’s high interest rates on any type of loan,” Tesla CEO Elon Musk said at the time.
2023-09-05 16:00:38
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