Tesla reignites EV price war with new round of cuts in China

afr.com:

Tesla cut prices again in China, sending auto stocks tumbling on concerns the move will rekindle an international price war that had shown signs of abating.

The automaker marked down the Long Range and Performance versions of the Model Y sport utility vehicle by 14,000 yuan ($2930) to 299,900 yuan and 349,900 yuan, according to a post on its Weibo account. Tesla also extended an 8000-yuan insurance subsidy for the base version of the Model 3 sedan, keeping the perk in place through the end of next month.

Tesla’s actions follow moves by Geely Automobile’s Zeekr brand, which lowered prices by as much as 37,000 yuan last week. Bloomberg

The reductions — amounting to about 4.5 per cent and 3.8 per cent for the two Model Y versions, respectively — may presage “similar select cuts” in the US and Europe soon, Chris McNally, an analyst with Evercore ISI, said in a note. That would pressure the company’s third-quarter profit margin, he added.

Tesla’s actions follow moves by Geely Automobile’s Zeekr brand, which lowered prices by as much as 37,000 yuan last week, as well as Zhejiang Leapmotor Technologies, which discounted by as much as 20,000 yuan at the beginning of the month. Tesla started the price war with an initial round of cuts beginning late last year that have made some of its models almost 50 per cent cheaper than in the US and Europe.

Tesla’s stock fell 2.9 per cent at 9:43 a.m. in New York trading. Rivian Automotive Inc. and Lucid Group Inc. also declined. China’s best-selling automaker, BYD Co, sank 6.2 per cent in Hong Kong, while Li Auto Inc, Xpeng Inc and Leapmotor shares all slumped.

“Price competition has been and will remain an ongoing theme in China’s auto market,” said Joanna Chen, an auto analyst at