Tesla cuts prices of all Model 3, Model Y electric cars in China to keep up with buyers flocking to cheaper models amid job cuts, slowing economy

Tesla is slashing the price of its China-made electric cars (EVs), turning a temporary discount into across-the-board cuts to stay abreast with customers who are drifting down market for cheaper models amid an economic slowdown in the world’s largest automobile market.

The US carmaker marked down the price of its entry-level Model 3 electric cars by 36,000 yuan each, or by 13.5 per cent, to 229,900 yuan (US$33,540), according to an announcement on Tesla’s website in China. The basic Model Y sports-utility vehicle (SUV) was discounted by 10 per cent, starting at 259,900 yuan.

Discounts applied to every variant of the Model 3 and Model Y made at the Gigafactory outside Shanghai, driving prices to their lowest levels since the first Tesla vehicle rolled off the wholly foreign-owned factory in December 2019.

The discounts supersede a set of incentives and temporary discounts that Tesla extended just this week until the end of February, according to a sales manager. The generous move underscores the carmaker’s struggles after it missed its 2022 worldwide delivery targets, and was overtaken by the Chinese battery and carmaker BYD as the world’s largest EV producer by a gap of about 29 per cent.

Tesla is the bellwether in the premium segment of China’s EV market, where it competes with a trio of upstart carmakers Nio, Xpeng and Li Auto to sell EVs at around 300,000 yuan each. BYD dominates the lower end of the market, where its no-frills models sell at between 100,000 and 200,000 yuan.