The era when Tesla owned the EV market is over. It shows in China, where fierce competition has forced the American brand to lower prices by 5%.
With Giga Shanghai as a global hub and its most significant export base, China is not only crucial for Tesla for assembly and production strategy. Worldwide it’s the most important market for electric cars by numbers. For Tesla, it’s the second biggest market in size.
Lower order reserve
As 2022 is a year where the American EV maker wants to decisively ramp up sales and output, aiming at 1,5 million units in total, its performance in China pulls in a lot of weight. As a result, the order reserve is slowing down.
With sales having risen roughly 70% in China year-to-year, the numbers are still encouraging. But intense competition is growing fast, especially from players like BYD, the local brand that tops the charts and roughly sells 200 000 units per month. Tesla shifts a bit less than half of that. The Chinese brands own 80% of their home market.
Strong spec, lower price
Upping the paces is also the arrival of the BYD Seal, launched in China during the summer with a price tag undercutting pre-sales by roughly 450 euros, signaling how price-sensitive the competition has become. That compact sedan offers strong specs but at a lower price point than the Model 3, starting at 209 800 yen (post-subsidy).
Under the new pricing scheme, the Tesla Model 3 starts at 265 900 yen (down from 279 900) after subsidies. The base version of the Model Y costs 288 900 (incentive included) instead of 316 900. A significant drop since that version of the Model Y has now become eligible for a purchase incentive, which wasn’t the case before Tesla’s renewed price policy.