Tesla rolled out price cuts of its China models this week, accelerating a price war in the world’s largest EV market that is threatening to drive out weaker carmakers. Tesla China slashed prices for all versions of its premium Model S and Model X by up to 6.9 per cent on Wednesday, with the starting prices reduced to Rmb754,900 ($103,467) and Rmb836,900, respectively. The price cuts followed markdowns of other models earlier in the week.
The move comes despite Tesla and 15 of its Chinese rivals signing a letter of commitment in July to compete fairly in the country’s car market and avoid “abnormal pricing”. However, the industry body retracted the commitment two days later, citing a violation of anti-monopoly laws.
China’s auto industry has been hit by slow economic growth and weak demand as officials struggle to boost confidence following years of harsh pandemic restrictions. Passenger vehicle sales declined for a second month in July, down 2.6 per cent from last year, data from the China Passenger Car Association showed.