Tesla rekindles EV price war with new round of cuts
BEIJING — Tesla Inc. cut prices in China on the Model Y long-range and performance versions, sending auto stocks tumbling on concerns the move will rekindle an international price war that had shown signs of abating.
Beginning Monday, the automaker dropped the starting prices of both Model Y models by 14,000 yuan ($1,934.58). The Model Y Long Range’s starting price drops 4.5 percent to 299,900 yuan and the starting price of the Model Y Performance is now 349,900 yuan, down 3.8 percent.
In the same announcement, Tesla also said it would offer insurance subsidies in China of 8,000 yuan for buyers of entry-level, rear-wheel-drive versions of the Model 3 in inventory between Aug. 14 and Sept. 30.
Last month Tesla CEO Elon Musk said further price cuts were a possibility, even if it squeezed the automaker’s margins.
The EV price cuts that have roiled the industry this year have also encouraged some prospective buyers to wait on the sidelines for further reductions, some anaysts believe.
The reductions may presage “similar select cuts” in the U.S. and Europe soon, Chris McNally, an analyst with Evercore ISI, said in a note. That would pressure the company’s third-quarter profit margin, he added.
Tesla has slashed prices several times in the U.S., China and other markets since late last year, and increased discounts and given other incentives to reduce inventory, trying to shield itself against competition and economic uncertainty.
