Following its announcement of the much-anticipated Model 3 sedan, Tesla cut prices on all other vehicles shortly. The move sparked fury among Chinese consumers who already find taxes and tariffs harder for them to purchase vehicles.
According to Seeking Alpha, Chinese consumers who just recently purchased the previously expensive Tesla electric vehicles were unhappy about the American automaker's decision to cut prices across its product list.
In China, tariffs and taxes result in much higher EV prices compared to other international markets. While others were confused about the shocking move, most buyers who purchased their vehicles over the past few weeks were disappointed after seeing the prices of their autos drop in a matter of hours.
Analysts predict that this serious backlash could result in problems for Elon Musk's company. Tesla is attempting to build a plant in Shanghai, but the latest issue could cause permit and funding-related problems to the electric vehicle maker.
The report noted that Chinese consumers who have been hit the hardest with Tesla's price cuts are those who own the Model X and S. With the new prices, the Model X is a whopping $50,000 cheaper than previously tagged.
Over the past couple of days, protesters have started putting up banners on storefronts in the country. Even Taiwanese buyers have picked up the rage and pointed out the car maker's poorly-handled prices and service.
Industry experts pointed out that China is a very critical market for the U.S. automaker. The company is relying largely on the government and the community's willingness to indulge in quality products from the company. However, any disruption could potentially pose threats to the car firm's plans of expanding in the world's second-largest economy, analysts stressed.
Meanwhile, NIO's plans to establish a factory in Shanghai have been blocked. According to Tech Node, an industry source said China's National Development and Reform Commission (NDRC) was behind the stoppage. The insider said the Commission asked local authorities to reject the plan.
This means NIO may have to wait for Tesla to establish its factory before the Chinese auto giant can get a green light on its plant project. Earlier last week, NIO announced that it would no longer push through with its Shanghai construction plans.
CEO William Li said the decision was made after Beijing recommended that the company set its eyes on "joint manufacturing" for the time being. Despite stocks falling since the announcement, enthusiasts are hoping for a comeback soon while the Chinese automaker waits for its turn in building a Shanghai-based factory.
