Tesla Gets Sucked Further Into China's Price War -- Here's Why It Will Succeed Anyway
Tesla is making a rare cut to its vehicle pricing in China, which could be the small boost it needs domestically to add to its export strategy.
Tesla finds itself ensnared deeper in China's escalating price war. Despite global investors' hopes that the summer would see a respite in the downward spiral of China's vehicle market, the opposite has transpired. Sales have plummeted further, plunging the market into its deepest slump ever. Even more, the price war has intensified as more manufacturers introduce competitive, low-priced offerings.
With China's automotive sector teetering on the brink of a historic double-digit annual decline, Tesla (NASDAQ: TSLA) is attempting to turn the tide by reducing prices. However, Tesla has a unique weapon in its arsenal. The company has lowered the price of its locally produced Model 3 electric vehicle by 2.2%, or roughly $745, to around $33,160.
But Tesla didn't stop at price reduction. The firm also added a $1,192 subsidy for vehicle insurance for customers placing their orders in September. The Model Y has received an even more substantial price cut of 3.8%, or about $1,490, bringing its new price to $37,780.
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