Elon Musk’s Tesla is trying to drive up sales in the world’s largest auto market, issuing new incentives in the rejuvenated price war against rivals like BYD.
The Austin, Texas-based electric vehicle maker said on Friday (Mar. 1) that customers purchasing from existing inventories of its rear-wheel-drive Model 3 sedans and Model Y SUVs would be eligible for as much as 34,600 yuan ($4,807) by the end of the month, according to a post on Tesla’s Weibo account.
Incentives include discounts up to 8,000 yuan on car insurance products with Tesla partnerships and 10,000 yuan on some body paint colors.
Those incentives follow other lucrative lures for Chinese EV buyers. In January, Tesla cut prices on its Model 3 and Model Y in China, which it would also expand to the über-fierce German market.
Tesla and BYD square up their EV battle
Tesla has been under pressure from increased competition and price cuts in the Chinese market as automakers push to widen their market share. After years of rapid growth, demand for EVs has begun to slow, even in the world’s second-largest economy.
The company’s new incentives come shortly after BYD, the Chinese EV maker backed by the likes of Warren Buffett, slashed prices and announced cheaper editions for four consumer vehicles. The move triggered immediate responses from several automakers — including Changan Automobile, Hyundai Motor, and the General Motors-backed joint venture SAIC-GM-Wuling — who quickly issued their own price cuts to keep apace.
Musk’s company has been on the defense against Shenzhen-based BYD, which has vigorously challenged Tesla’s authority as the world’s premier EV maker. The Chinese company ended the last quarter of 2023 by beating Musk’s automaker in electric car sales; BYD had already become the world’s biggest seller of EVs a year prior.
BYD is “very strong now,” Zhao Changjiang, the head of sales for BYD’s Denza joint venture with Mercedes-Benz, wrote last month in a now-deleted Weibo post viewed by Bloomberg News.
“You’ll face serious challenges in advanced driver-assistance system and car models in 2024, such as Denza’s N7 changing the landscape of the auto market and triumph over the ‘Y’ model!” he added, warning that Tesla may lose its market share as BYD grows.
In addition to putting out cheaper variants of its already well-known models, BYD has been upping the market pressure with more sophisticated offerings. This week it unveiled a new “supercar” — the $233,000 Yangwang U9 — as part of its push to conquer the high-end EV market.
This latest scuffle over EV prices in China comes more than half a year after Tesla and China’s top EV makers pledged to avoid “abnormal pricing” after months of aggressive price cuts that rattled the wider industry. Tesla’s price cuts even sparked protests among some owners who were furious they paid more for their EVs than other customers.