Gary Zhou 
Key Points
- ⚙️ Tesla reduces Model Y prices in China by up to 4.5% to boost production.
- 🚗 Model Y Long Range starts at 299,900 yuan ($41,291), and Performance at 349,900 yuan ($48,176).
- 💰 Subsidies of 8,000 yuan ($1,101) offered on Model 3 Rear-Wheel-Drive configurations until September 30.
- 📉 Tesla aims to stimulate demand and compete by frequently adjusting prices.
- 📊 After a weak July in China, Tesla slashes prices to attract more consumers.
- 💬 Elon Musk believes sacrificing margins for more vehicle production is a sensible strategy.
- 💡 Analysts’ predictions confirmed as Tesla continues its price-cutting approach.
Tesla has initiated a price reduction on its Model Y crossover in China, with discounts reaching up to 4.5 percent. Both the Model Y Long Range and Performance configurations have seen their prices drop. The Long Range variant now starts at 299,900 yuan ($41,291), while the Performance configuration begins at 349,900 yuan ($48,176), reflecting decreases of 4.5 and 3.8 percent, respectively.
In addition, Tesla announced it will provide subsidies of 8,000 yuan ($1,101) for Model 3 vehicles. This rebate will remain available from today until September 30 and applies to the Rear-Wheel-Drive configurations of the Model 3.
Throughout this year, Tesla has been consistently adjusting its prices, with the majority of reductions taking place in the first months of 2023. This pricing strategy is a deliberate move by the automaker to combat competition and boost demand across different markets.
Following a lackluster performance in China during July, Tesla might be seeking to reignite consumer interest in its vehicles. The company’s wholesale unit sales dropped by over 31 percent from June, with 64,285 units sold in July.
However, these price cuts were somewhat anticipated. During the Q2 Earnings Call held late last month, CEO Elon Musk acknowledged that price reductions were a possibility as the company aimed to maintain pressure on its profit margins.
Musk emphasized that sacrificing margins in favor of expanding vehicle production and sales was a strategic choice he was willing to make. This approach seems to be Tesla’s current course of action.
Musk commented during the call, “I think it makes sense to sacrifice margins in favor of making more vehicles. If market conditions remain stable, I expect prices to remain stable. If they’re not stable, then we would adjust prices accordingly.”
Tesla’s recent move aligns with the predictions of analysts, who anticipated that the automaker would continue its trend of price reductions.
