China’s biggest electric carmakers such as NIO, XPeng and Li Auto suffered sales slumps in October after production was disrupted by the Covid-19 pandemic for the second time this year.
Not only that but their performance was further undermined by the decision of Tesla, the leader in the mainland’s premium electric vehicle (EV) segment, to reduce the price of vehicles made in Shanghai.
Specifically, Tesla announced a discount policy for two Tesla Model 3 and Tesla Model Y models. In Tesla’s announcement, these models when manufactured in China will have a reduction of 5.2%, respectively and 5.6%.
Specifically, the Model 3 made in China will have a new starting price of 265,900 yuan compared to the old price of 279,900 yuan, while the Model Y will be reduced to 299,988 yuan from the old price of 316,900 yuan.
The announcement comes at the right time when Tesla’s revenue in the billion-population market begins to show signs of cooling down. Many other competitors from China attract users with more competitive models. The move is important because Tesla has only applied the new pricing in China, showing that this is a hugely important market for Tesla’s electric vehicle sales.
Regarding the number of cars shipped, the number of Tesla cars offered is showing signs of decreasing. According to the China Motor Vehicle Statistics Organization, the number of vehicles shipped at the Gigafactory Shanghai in October was only 71,704 vehicles compared with 83,000 vehicles in September. However, compared with 28,000 vehicles in July due to the impact of the epidemic disease, the number of vehicles shipped has been greatly improved.
According to Jeff Chung, a market researcher at Citi, after comparing and checking with other electric vehicle dealers, he found that the number of orders had been significantly canceled and users mainly switched to buying discounted Tesla models.
Of which, Shanghai-based NIO, delivered 10,059 units in October, down 7.5% from the previous month. Beijing-based Li Auto sold 10,052 vehicles, down 13%.
Experts said that this discount of Tesla does not have much impact on the short-term delivery speed, buyers will receive the car after 1 month from the time of ordering. Lower prices also lead to increased Chinese buying demand, Tesla’s increase in production capacity at Tesla’s Shanghai factory will probably help keep the car delivery milestone after this month.
References: Electrek, SCMP
Source: Vietnam Insider