Tesla Inc. rolled out a new round of price cuts in China, sending auto stocks tumbling on concerns the move will respark a bruising price war that had showed signs of abating.
(Bloomberg) — Tesla Inc. rolled out a new round of price cuts in China, sending auto stocks tumbling on concerns the move will respark a bruising price war that had showed signs of abating.
The automaker reduced the price of the top-end Long-Range and Performance versions of the Model Y sport utility vehicle by 14,000 yuan ($1,900) to 299,900 yuan and 349,900 yuan respectively, according to a post on its Weibo account on Monday. An 8,000 yuan insurance subsidy on newly purchased Model 3 rear-wheel drive vehicles was also extended until the end of next month.
The cuts follow the likes of Geely Automobile Holdings Ltd.’s Zeekr brand, which lowered prices as much as 37,000 yuan last week. Zhejiang Leapmotor Technologies Ltd. cut by as much as 20,000 yuan at the start of the month. Tesla triggered the price war with an initial round of cuts last year before further discounts in January that left Tesla’s locally made cars as much as 14% cheaper than last year, and in some cases almost 50% less expensive than in the US and Europe.
China’s best-selling auto brand BYD Co. sank 7.6% as of 11:40 a.m. in Hong Kong trading. Li Auto Inc. was down 3.9% lower, Xpeng Inc. fell 6.2% and Leapmotor Technologies Ltd. was off 6.4%.
“Price competition has been and will remain an ongoing theme in China’s auto market,” said Joanna Chen, an auto analyst at Bloomberg Intelligence. “Tesla is trying to keep volume rolling after July sales showed its slowing order intake without new models to attract Chinese buyers.”
Tesla’s China deliveries slumped 31% in July to the lowest level this year — just as the carmaker plans to soon unveil its revamped Model 3 “Highland” sedan from its Shanghai factory.
Clean car sales in China declined in July from June, though purchases shifted towards major players with BYD, Li Auto and Nio Inc. all reporting new sales records.
–With assistance from Chunying Zhang and Charlotte Yang.
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