auto news desk,Elon Musk’s car maker Tesla has started a price war in China. According to the information, the company is giving up to 50 percent discount on its cars in China. According to the Bloomberg report, under this price war, the company is preparing to bring a big change in the worldwide car market. Tesla started cutting the prices of its vehicles in October 2022. The company made Tesla cars 14 percent cheaper in January 2022. The American EV maker produces 3 sedans and the Model Y crossover from its Beijing-based factory. These models are now about 50 percent cheaper in China than in the US or Europe.
Market condition is going from bad to worse
The company has launched this price war at a time when consumer spending in China has come down significantly by the end of 2022 after Covid restrictions and the removal of government subsidies for electric vehicles. Also, due to the global slowdown of the supply chain, the market situation is getting worse.
Other companies are also reducing prices
To keep their sales strong, other EV companies are also being forced to reduce the price of their cars. Companies like Volkswagen AG and Mercedes-Benz Group AG are now offering discounts of up to 70,000 yuan, or $10,000, on their cars. At the same time, Ford Motor Company is also offering its E electric crossover at a discount of 209,900 yuan i.e. $ 30,562, which is a third the price compared to the US. According to Bloomberg’s report, a total of 30 car companies have also reduced the prices of their cars due to Tesla’s huge discounts.
Sales of electric vehicles will increase
The China Association of Automobile Manufacturers has urged Tesla to end the ongoing price war in the country by March 22, 2023, saying it is “not a long-term solution to the anticipated slowdown in EV sales in China.” Despite the economic downturn, by November 2022, Tesla had set a record for shipping 100,000 EVs from Shanghai. In 2023, EV sales in China are expected to reach 8.1 million units, far higher than Europe’s 3.2 million and the US’ 1.9 million.