After revealing a refresh of its Model 3, Tesla Inc. has cut the price of its Model S and X cars in a bid to boost sales.
In China, the price of the Model S is reduced by 14% to 698,900 yuan ($96,200) and the Model X by 18% to 738,000 yuan. The steep price cuts have also seen the price of the self-driving feature reduced by $3,000 to $12,000.
Tesla has been embroiled in a price war with Chinese competitor BYD for the last several months.
BYD, an auto manufacturer that makes batteries in-house, held the second-largest global EV market share with 16.2% in Q1.
The price war began in January when Tesla cut prices in China, which prompted several auto manufacturers to follow suit to stay competitive.
A so-called ‘truce’ to avoid prices deteriorating was enacted. The pledge was later abandoned on 10 July when The China Association of Auto Manufacturers (CAAM) acknowledged it had violated China’s antitrust laws.
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Tesla was accused of ‘reigniting’ the EV price war with a fresh round of price cuts earlier this month. The auto manufacturer discounted two versions of Model Y by 4% or around $1,900.
According to data from research firm GlobalData, EV venture financing deals have boomed in China as domestic manufacturer BYD aims to sell 3 million vehicles by the end of 2023. Domestic rivals Nio Inc. and XPeng Inc. are also developing their car lineups.
China is the global leader in producing EV batteries, thanks to its control over the supply chain and access to raw materials such as lithium and cobalt.
Chinese EV manufacturers also benefit from government subsidies, tax breaks and other incentives.
The car manufacturing giant is also facing difficulties at home where, earlier this week, two former Tesla employees were accused of leaking 75,735 current and former employee’s data to media outlet Handelsblatt in May.
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