Tesla lowers mainland pricing amid slowing sales

Tesla has cut the prices of its Shanghai-made vehicles by more than 5 per cent on the mainland, joining an intensifying discount war in the country amid a slowdown in the carmaker’s sales globally.

Earlier this month, Tesla had raised the price of the Model Y SUV by nearly 2 per cent, attempting to buck the trend of price cuts in China.

Tesla yesterday reduced the price of its entry-level Model 3 from 245,900 yuan (HK$265,500) to 231,900 yuan, and is now offering the Model Y from 249,900 yuan onwards, compared with 263,900 yuan previously.

The US manufacturer of electric vehicles (EVs) also slashed the prices of the high-end Model S and Model X by more than 15 per cent and 19 per cent, respectively, in its second biggest market.

“Tesla’s Shanghai-made Model 3 and Model Y vehicles remain attractive to young motorists in China who regard the US carmaker as the global leader in EV development,” said Zhao Zhen, a sales director with Shanghai-based dealer Wan Zhuo Auto.

“Further price reductions are expected if delivery volumes fail to live up to the company’s expectations.”

The fresh round of price cuts on the mainland came on the heels of the company lowering prices in the US, its biggest market, on Saturday.

Tesla earlier this month said it had delivered about 387,000 vehicles in the first three months of this year, which represented a more than 8 per cent drop from the same period a year ago.

The EV maker’s shares have plunged more than 40 per cent since the beginning of this year. It is set to report its first-quarter earnings tomorrow.

The price cuts also came after Tesla last week slashed its payroll in China, which mainly affected sales staff, amid falling deliveries in the world’s largest EV market.

On the mainland, sales between January and March dipped 3.6 per cent from the fourth quarter of 2023 to 132,420 units. And while Tesla is still the second-best EV seller in China, it faces cutthroat competition as domestic rivals continue to offer aggressive discounts.

BYD, the world’s bestselling EV builder, has slashed the prices of nearly all of its cars by 5 per cent to 20 per cent since late February, as the industry’s growth in China showed signs of tapering off.