Tesla China Announces Price Cut for Some Models, Continues Aggressive Pricing Strategy
August 14, [Year] – Tesla China has officially announced a price cut of 14,000 yuan for select models. The price adjustment includes the long-endurance version of the Model Y, which now starts at 299,900 yuan, and the high-performance version, starting at 349,900 yuan. Additionally, existing Tesla Model 3 owners can enjoy a limited-time insurance subsidy of 8,000 yuan. However, the standard battery life version of the Model Y did not participate in the price reduction and remains priced at 263,900 yuan.
Tesla has been implementing price cuts as a regular part of its strategy since the beginning of this year. The company has adjusted prices multiple times in the Chinese market, and the pace of price adjustments has not slowed down in the second half of the year. In July, Tesla China announced discounts ranging from 35,000 yuan to 45,000 yuan for the purchase of Model S/X cars.
The automotive market has seen a new round of price wars, with 10 brands, including Jikrypton, Weilai, Leapao, and Nezha, announcing promotional activities in August alone. The Federation of Passengers and Passengers expects this trend to continue, with some auto companies implementing counter-cyclical promotions.
Despite facing criticism for sacrificing profitability, Tesla CEO Elon Musk has repeatedly stated that the company will continue to cut prices. In the second quarter of this year, Tesla experienced a decrease in profits due to price reductions, with its gross profit margin dropping to 18.2%. However, Musk remains focused on growth, even at the expense of short-term profitability. He believes that pursuing self-driving technology, such as full self-driving (FSD), will eventually lead to profitability.
While the Model 3 did not participate in the recent price cuts, Tesla announced a new round of 8,000 yuan limited-time insurance subsidies for existing cars. This move suggests that a new model may be on the horizon. Earlier reports indicated that Tesla is developing a remodeled Model 3, codenamed “Highland,” aimed at reducing costs and attracting customers. The new model is expected to have fewer parts and simplified features while maintaining customer-favored displays. Production of this new model is rumored to begin in the third quarter of 2023 at Tesla’s Shanghai Gigafactory.
In July, Tesla sold 64,300 vehicles in China, with Model Y and Model 3 sales reaching 44,000 and 20,300, respectively. The company’s cumulative sales in China for the first seven months of the year totaled 540,800 vehicles, reflecting a year-on-year increase of 67.5%.
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