Tesla’s China rivals cut prices to take advantage of Musk carmaker’s new hike of Model Y price

Apr 1, 2024 9:04 pm | News

China’s automakers are piling in to take advantage of Tesla Inc.’s recent price hike and defend against Xiaomi Corp.’s disruptive market entry, offering sweeteners such as subsidies and coupons to lure would-be car buyers.

Shanghai-based Nio Inc. announced a plan on Monday that provides for up to 1 billion yuan ($138 million) of incentives for drivers of gasoline cars to make the switch, in the form of battery swap benefits, additional assisted driving function subscriptions and even a Nio mobile phone, according to the company’s official Weibo channel.

Xpeng Inc. meanwhile cut the price of some of its models by as much as 20,000 yuan and Chery Automobile Co. said it will cover the cost of purchase taxes on selected models plus offered better trade ins for customers’ used cars.

The moves run counter to what Elon Musk’s carmaker did earlier on Monday when it increased the price of its most popular Model Y sport utility vehicle. That hike was widely telegraphed for several weeks, most likely to spur demand ahead of the actual event and plump first quarter sales. Local manufacturers’ response is testimony to the intense competition in China’s automobile market, the world’s largest.

Despite letting people know prices were going up, Tesla was forced to trim production from its Shanghai factory, Bloomberg reported late last month. Tesla shipments recorded a decline in the first two months of 2024 from the same period a year ago while overall passenger vehicle sales in China increased.

The fresh raft of sweeteners and price adjustments come as consumer electronics giant Xiaomi also officially broke into the world’s biggest EV market, last week unveiling the pricing and starting order intake for its much-touted SU7. Pre-orders for the model topped 88,898 within 24 hours, Xiaomi said in a later social media post.

feed from fortune.com