A bitter price war between Tesla (TSLA) and domestic rivals sent Chinese electric vehicles plunging last month, adding to concerns about the company’s declining market share in the country.
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Prices of EVs and other new energy cars fell 5.8% in January, while traditional fuel car prices fell 4.6%, according to the official consumer price inflation figures out today.
TSLA Battles Domestic Competition
BYD (BYDDY) cut the price of its Sealion 05 hybrid SUV in December by 11.5%, reigniting a price war in the world’s largest EV market by volume. The Chinese automaker also asked suppliers to cut prices by 10%, fuelling expectations that the price war is set to continue. In February 2024, BYD reduced prices on almost all of its models by 5–20%
Tesla last year cut the price of its Model Y and offered interest-free financing in a bid to boost sales. It has now extended incentives, offering buyers of its Shanghai-made Model 3 sedans rebates on car insurance and loans in February, albeit it actually raised the price of this model earlier this year. It is offering a subsidy worth around $1,000 for vehicle insurance, as well as a five-year interest-free loan to eligible customers.
XPeng (XPEV) responded with its own offer for interest-free loans on some of its EV models.
Manufacturers cut prices on 227 models in China last year, according to data from the China Passenger Car Association.
It comes as data shows Tesla’s China-made EV sales plummeted in January as competition from domestic rivals intensified. TSLA sold 63,238 units of its EVs last month, down 11.5% from the 71,447 sold during the same month a year ago.
BYD meanwhile posted a 48% jump in January car sales in China from a year before, albeit this was down 42% from December’s figure.
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