Musk cuts Tesla prices in China for second time as demand falls

CHINESE drivers will pay almost half as much for a Tesla than customers in the United States after Elon Musk’s electric car company made another round of price cuts in the world’s second biggest economy.

Buyers of the locally built Model Y in China will pay 43pc less than they would for the most basic model availa- ble in the US.

Tesla cut the ticket price for the sport utility vehicle by 10pc yesterday to a new low of 259,900 yuan (£31,891), according to the company’s China website.

The price of a Model 3 was also reduced from 265,900 yuan to 229,900 yuan, which is about 30pc cheaper than in the US.

Tesla also slashed prices in Japan yesterday, cutting the entry-level Model 3 by 10pc to 5.4m yen (£33,863) and the Model Y by 9.9pc to 5.8m yen.

It is the second time that prices have been cut in China in recent months, amid increased competition and signs of flagging demand. Prices were also cut in October.

Tesla is a dominant player in China’s mass market for electric vehicles.

But it faces growing competition from domestic producers such as Warren Buffett-backed BYD, Xpeng and Nio, as well as international

players inlcuding Porsche and Mercedes Benz.

Tesla, based in Austin, Texas, introduced discounts elsewhere in the world towards the end of last year in an effort to hit delivery targets that were ultimately missed.

Earlier this week, Tesla announced that global deliveries were lower than expected for a third quarter in a row, prompting a 12pc plunge in its share price.

Shareholders are concerned that rising interest rates and faltering economic growth around the world will lead to lower demand for Mr Musk’s electric cars.

Wholesales slowed to about 56,000 in December, almost half the November number, after production was suspended because of equipment upgrades and lacklustre demand.

The company’s share price was down as much as 4pc in early trading yesterday after news of the second round of price cuts in China broke.

Tesla localised production of Model 3 sedans in Shanghai at the end of 2019.

Its factory in the city is capable of churning out 450,000 cars a year and started shipping Model Ys from there in January 2021.

Tesla shipped more than 710,000 vehicles from Shanghai in 2022 – about 52pc of its worldwide production.