Tesla reignites electric vehicle price war with new round of cuts in China

Tesla Inc. cut prices again in China, sending auto stocks tumbling on concerns the move will rekindle a price war that had shown signs of abating.

The automaker marked down the Long Range and Performance versions of the Model Y sport utility vehicle by 14,000 yuan ($1,900) to 299,900 yuan and 349,900 yuan, according to a post on its Weibo account. Tesla also extended an 8,000-yuan insurance subsidy for the base version of the Model 3 sedan, keeping the perk in place through the end of next month.

The cuts follow moves by Geely Automobile Holdings’ Zeekr brand, which lowered prices by as much as 37,000 yuan last week, as well as Zhejiang Leapmotor Technologies, which discounted by as much as 20,000 yuan at the beginning of the month. Tesla started the price war with an initial round of cuts beginning late last year that have made some of its models almost 50 per cent cheaper than in the US and Europe. Tesla’s stock fell as much as 1.7 per cent in early US trading, while China’s best-selling automaker BYD sank as much as 8.7 per cent in Hong Kong. 

Li Auto, Xpeng, and Leapmotor shares all slumped. “Price competition has been and will remain an ongoing theme in China’s auto market,” said Joanna Chen, an auto analyst at Bloomberg Intelligence. “Tesla is trying to keep volume rolling after July sales showed its slowing order intake without new models to attract Chinese buyers.”