Tesla Cuts Prices In China By 9% As Buyers Opt For Local EVs

Tesla has slashed starter prices for its Model 3 and Model Y cars by as much as 9% in China, reversing a trend of increases across the industry as demand softens while local electric cars secure higher market shares, Zhang Yang and Brenda Goh reported for Reuters.

Photo Insert: The starting price for the Model 3 sedan was reduced to 265,900 yuan ($36,727) from 279,900 yuan, while that for the Model Y sport utility vehicle was cut to 288,900 yuan from 316,900 yuan.

The price cuts, posted in listings on the electric vehicle (EV) giant's China website on Monday, Oct. 24, 2022, are the first by Tesla in China in 2022, and come after Tesla began offering insurance incentives to buyers last month.

The move to reduce some prices by nearly a tenth comes after Tesla Chief Executive Elon Musk said last week that "a recession of sorts" in China and Europe was weighing on demand for its electric cars.

Data on Monday showed retail sales in the world's no. 2 economy grew 2.5% in September, below the expected 3.3% rise and less than half August's 5.4% growth.

Analysts are warning of growing inventory glut in China, where auto sales growth slowed in September while EV sales rose at their slowest pace in five months.

The US automaker and several Chinese rivals have hiked prices several times since last year amid rising raw material costs. But Tesla has also regularly adjusted prices of its cars in China, including reductions, reflecting government subsidies.

The starting price for the Model 3 sedan was reduced to 265,900 yuan ($36,727) from 279,900 yuan, while that for the Model Y sport utility vehicle was cut to 288,900 yuan from 316,900 yuan, the product prices listed on its Chinese website showed.

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