Consistent Price Cuts Tesla is not just reducing prices; it seems to be on a continuous journey of price reduction. After recently decreasing the price of its primary vehicles, Tesla is now taking the "price butcher knife" to its premium models.
On August 16, Tesla's official Weibo account announced another price cut for the Tesla Model S and Model X in China. The discount ranged from 54,000 yuan to 70,000 yuan. The Model S is now starting at 754,900 yuan, down from its original price of 808,900 yuan. The Model X now starts at 836,900 yuan, down from 898,900 yuan. Additionally, they are offering perks such as 3/6 years of free supercharging, referral rewards, and limited-time transfers of FSD capabilities.
Moreover, by referring a friend to purchase a Model S or X, the buyer can receive a 7,000 yuan referral discount on their final payment and 90 days of free Enhanced Autopilot (EAP). The referee can benefit from 48,000 reward points, which can be exchanged for supercharger mileage or a TeslaMic wireless microphone.
Interestingly, just two days before this announcement, Tesla revealed a price adjustment for the long-range version of the Model Y: from 313,900 yuan to 299,900 yuan. The performance version of the Model Y was reduced from 363,900 yuan to 349,900 yuan, a drop of 14,000 yuan. The Model 3 also indirectly saw a price cut of 8,000 yuan.
This marks Tesla's third price cut in the second half of this year and the eighth direct or indirect price discount since last September.
With the price range of these two Tesla models hovering between 750,000 yuan and 850,000 yuan, they don't face much competition. Their main competitors are the HiPhi X from Human Horizons and the Porsche Taycan.
Signs of a Drop?
The signs of a Tesla price cut were evident earlier. After a sales slump in July, Elon Musk mentioned during Tesla's Q2 earnings call that if the economic environment continued to deteriorate, Tesla might further reduce car prices to maintain sales volume.
In July, while the overall Chinese car market was booming, Tesla faced a significant drop in sales. Their July sales were only 64,000 units, a sharp decrease of 31.4%, marking the lowest level for the year.
A New Era of Price Wars
Before Tesla drew its "price butcher knife", many domestic new energy vehicle manufacturers in China were already reducing prices.
On August 1st, SAIC Volkswagen announced that from August 1st to August 31st, nine of their SUV models would see price cuts, with the most substantial discount being up to 60,000 yuan. Some models even come with additional benefits like five years at 0% interest and up to an 8,000 yuan trade-in bonus or purchase subsidy.
On the same day, a rising car manufacturer, Lixiang Automotive, stated that starting from midnight on August 1, 2023, they would adjust the prices for several models of their C11 and C01 electric vehicles, with the most significant reduction being 20,000 yuan. The affected models include the C11 650, C11 580, C01 606, C01 717, and C01 630.
