Tesla’s Model Y price cut painful for luxury brands

The ripple effect of Tesla's surprising price reduction for the Chinese- made Model Y cars has continued, with market attention focused on the future competitive landscape created by the foreign player that has stirred up the new- energy vehicle ( NEV) market in China.

Tesla's price cut will mainly have an impact on the traditional luxury brands such as Benz, BMW and Audi, whose sport utility vehicle ( SUV) models have sold well in the Chinese market, experts said. But rising domestic NEV players such as NIO, XPeng and Li Auto, generally called the “new force” in challenging Tesla, will face less pressure.

In a Tesla store at the HKRI Taikoo Hui shopping square at Shanghai, a sapphire- colored Model Y was displayed in the store along with two Model 3s and one Model S. At about 2 pm on Tuesday, a steady flow of customers came in to inquire the basics of the model. There was hardly a moment when the car was ignored, while the two Model 3s had a lot of idle time.

One female customer ordered a Model Y vehicle after she and her child sat inside the car for a while and listened to an introduction by the salesperson.

A male customer said he dropped in to have a look at the Model Y, and is still weighing whether to choose it or a NIO car. “My first car is a BMW, and I am considering buying an electric car for a change.”

Cui Dongshu, the secretary general of the China Passenger Car Association, said that rising Tesla challengers have their unique features and they have cultivated users who have high brand loyalty, so the Model Y's price cut will not deal a blow to them.

“The changes will take place in the traditional auto market where the internal combustion engine is dominant. Luxury SUV manufacturers will face mounting pressure in this regard,” Cui noted. Page Editor: zhanghongpei@globaltimes.com.cn