A perfect storm seems to be brewing in China, and the country’s local electric vehicle champions are feeling some pressure. Covid measures and Tesla price cuts for the Model 3 and Model Y from Gigafactory Shanghai are among the sources of this pressure.
China’s local electric vehicle makers have experienced some momentum in the country’s domestic electric vehicle market, especially with Tesla’s vehicles like the Model 3 and Model Y being priced at a premium. So notable was the rise of China’s EV players that some Tesla critics have cited their performance as proof that the Elon Musk-led company has a demand issue.
This momentum seemed to have been hit hard in October, however. As per a report from the South China Morning Post, the country’s biggest domestic electric vehicle makers suffered a sales setback in October, thanks to a combination of the country’s Covid-related policies and Tesla China’s price cuts for the Model 3 and Model Y.
With the Model Y and Model 3 becoming more affordable, the offerings of China’s three main EV startups — NIO, Li Auto, and Xpeng — have seen a notable amount of challenges. Shanghai-based NIO, for one, delivered 10,059 units in October, down 7.5% from a month earlier. Beijing-headquartered Li Auto sold 10,052 vehicles, down 13%.
Xpeng, a company that has butted heads with Tesla in the past for allegedly stealing Autopilot code, saw the most notable decline in October. The Guangzhou-based electric vehicle startup delivered 5,101 cars last month, a 40% decline.
Gao Shen, an independent analyst in Shanghai, shared his thoughts on the matter. “Virus control affected their manufacturing and sales last month. Tesla’s price cuts have also siphoned off buying interest from Chinese-branded vehicles,” Shen noted.