Tesla announces price drop

MEXICO CITY.—Tesla announced sharp price cuts in China and Germany shortly following lowering prices in the United States, at a time when the world’s largest electric car maker faces falling sales and high competition. in the main markets.

The firm on Sunday lowered the base prices of four models sold in mainland China, its largest foreign market, by 14,000 yuan (US$1,932). The Model Y, the company’s best-selling car in the country, now has the lowest base price since it was launched: 249,900 yuan (US$34,502).

In Germany, Tesla’s largest market in Europe, the price of its rear-wheel drive Model 3 also dropped by regarding 2,000 euros ($2,132) to 40,990 euros ($43,707), according to its official website.

The first cuts were announced on Friday in the United States when the company lowered prices on three of its five models. The prices of the Model Y, Model

The avalanche of cuts comes at a difficult time for Tesla. Its shares have plunged more than 40% so far this year, following it reported a drop in quarterly deliveries for the first time in almost four years, and announced job cuts of 10% of its global staff.

The most difficult market

In China, the world’s largest electric vehicle market, Tesla’s price drop is expected to exacerbate the market war in the highly competitive sector.

Yesterday, the Chinese electric car manufacturer Li Auto responded to the measure and announced that it will lower the prices of its four models. Its Li Mega, which it claims is the world’s largest electric passenger car, is now 30,000 yuan ($4,142) cheaper.

Tesla was narrowly dethroned by the Chinese company BYD, which was positioned as the best-selling electric vehicle brand in the world in the fourth quarter of last year.

Compared to Tesla, BYD vehicles are more affordable. Its basic model sells in China for the equivalent of just under US$10,000. By contrast, Tesla’s Model 3, its cheapest model, currently costs three times as much, at 231,900 yuan ($32,017) in China, following last Sunday’s price cut.

China’s electric vehicle price war began in October 2022, when Tesla lowered prices to boost sales as consumers cut spending in a slowing economy. Almost all major manufacturers, including those of gasoline vehicles, followed suit, affecting the profit margins of the entire auto industry.

Competition continues unabated in 2024, with more than 30 major automakers announcing new price cuts.

XPeng, the Guangzhou-based electric vehicle maker, said on Friday it would offer subsidies worth 500 million yuan ($69 million) to buyers who own four of its models.

In March, BYD lowered the base price of its cheapest electric vehicle, the Seagull hatchback, by 5% to US$9,670 (regarding 164,390 pesos). Later that month, smartphone maker Xiaomi joined the electric vehicle race by launching its SU7 sedan to compete with Tesla.— CNN