On January 12th, Tesla China announced a price adjustment for the Model 3 and Model Y rear wheel drive and long range versions, with a price reduction range of 6500 to 15500 yuan. Among them, the starting price of the updated Model 3 rear wheel drive has been adjusted from 261400 yuan to 245900 yuan, with a price reduction of 15500 yuan; The starting price of the new version of the Model 3 with long endurance has been lowered from 297400 yuan to 285900 yuan, with a price reduction of 11500 yuan; The starting price of the Model Y rear wheel drive version has been reduced by 7500 yuan to 258900 yuan after adjustment; The starting price of the Model Y Long Range Edition has been reduced by 6500 yuan to 299900 yuan after adjustment.
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Tesla explained the reason for this price adjustment, stating that Tesla, which adheres to "cost pricing," always favors consumers. The decrease in the prices of Model 3 and Model Y is expected to stimulate sustained consumer interest in Tesla and electric vehicles.
Tesla's price reduction has also sparked widespread discussion among netizens. A netizen urged, "Don't buy, hold back.". Some netizens also said, "As the first batch of new Model 3 owners, this' backstabbing 'came too quickly.".
Some argue that Tesla's price reduction this round may be related to the "low price entry" of a range of models that are benchmarking against the Model 3/Y, such as the Geely 007, Galaxy E8, Geely 01, and Zhiji LS6, as well as Xiaomi's first mass-produced model, the SU7 (which is about to be launched but has not yet been priced).
From the fourth quarter of last year to the beginning of this year, Tesla Model 3 and Model Y have faced numerous competitors in China. For example, the Zhiji LS6 (with a starting price of 214900 yuan) and Jiyue 01 (with a starting price of 249900 yuan), which were launched in October last year, both entered the market at prices lower than the starting price of Model Y in an attempt to seize their market share.
Xiaomi's first models, such as the SU7, Geely 007, Galaxy E8, and Star Journey Era ES, entered the market with more cost-effective or quality to price advantages, aiming to compete with the Model 3. For example, the starting price of the Extreme Krypton 007 is 209900 yuan; The Galaxy E8 starts selling for 175800 yuan; The Star Journey Star Era ES will be sold for 20000 yuan in the new year. "From beginning to end, we wanted to fight against Tesla," said Xia Yiping, CEO of Jiyue.
In fact, Tesla has already felt the pressure from Chinese brand electric vehicles. Official data shows that in 2023, Tesla produced approximately 1.85 million electric vehicles worldwide and delivered approximately 1.81 million, with year-on-year growth of approximately 35% and 38%, respectively.
In contrast, BYD has sold over 3.02 million new energy vehicles in 2023. In fact, in the fourth quarter of 2023, BYD's pure electric vehicle sales surpassed Tesla's. According to official data from BYD, in the fourth quarter of 2023, BYD sold over 526000 pure electric vehicles, while Tesla sold nearly 485000 vehicles during the same period. This breakthrough is seen by overseas media represented by Reuters as a symbolic turning point in the global electric vehicle market.
It is worth noting that as early as early as 2023, Tesla was the first to launch a price war for new energy vehicles, and since then, the price war in the domestic car market has not stopped. Entering 2024, several domestic car companies have launched a new round of price reductions, including lowering the prices of their models and offering limited time cash discounts.
According to a research report by Ping An Securities, the "price war" dominated by leading new energy vehicle companies in the Chinese market will continue in 2024, especially in the mainstream price range of 100000 to 200000 yuan, where competition will become more intense.
According to Wind News, Tesla may face more challenges in 2024 due to reduced subsidies for electric vehicles in countries such as the United States and Germany, as well as stricter investigations into autonomous driving functions in various countries, which may have an impact on its sales performance throughout the year.
In response, Chen Shihua, Deputy Secretary General of the China Association of Automobile Manufacturers, called for a healthier and more stable car market in 2024. Car companies should not use price as the most important means of competition, but rather improve their overall product competitiveness and brand power.
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