Tesla Cuts Prices for Model Y in China, Offers Insurance Subsidies
BEIJING, August 14 – Tesla Inc (TSLA.O) announced on Monday that it has reduced prices for its Model Y long-range and performance versions in China. The price cuts came into effect on August 14, according to a notice from the company.
The starting prices for both models have been decreased by 14,000 yuan ($1,934.58). The Model Y Long Range now starts at 299,900 yuan, a 4.5% drop, while the starting price for the Model Y Performance is now 349,900 yuan, down 3.8%.
In addition to the price reductions, Tesla also revealed that it will offer insurance subsidies of 8,000 yuan for Model 3 buyers who purchase entry-level, rear-wheel-drive versions of the Model 3 inventory vehicle. This offer is valid between August 14 and September 30.
This move comes after Tesla CEO Elon Musk indicated last month that further price cuts were a possibility, even if it meant squeezing the automaker’s profit margins.
Tesla has been implementing price cuts in various markets, including the United States and China, since late last year. These reductions, along with increased discounts and other incentives, have been aimed at reducing inventory and fending off competition and economic uncertainties.
However, despite these efforts, sales of Tesla’s China-made vehicles experienced a significant decline in July. Data from China Passenger Car Association (CPCA) revealed a 31% drop in sales compared to June, marking the first month-on-month decline since December.
The price cuts in China may help boost sales and regain momentum in the country’s electric vehicle market, which is highly competitive.
($1 = 7.2367 yuan)
Reporting by Shanghai newsroom and Liz Lee; Editing by Christian Schmollinger and Tom Hogue