Visitors view a Tesla Model 3 car next to the Model Y in the showroom of the U.S. electric vehicle (EV) maker in Beijing, China, February 4, 2023.
Florence Lowe | Reuters
tesla The company slashed prices on its existing inventory of Model S and Model X vehicles in China on Wednesday, as it looks to boost sales amid growing competition in one of its key markets.
Tesla said in a post on Weibo, a Chinese microblogging service, that the Model X will be priced at 836,900 yuan ($114,677), down from 898,900 yuan previously. The current price of Model S is 754,900 yuan, which is lower than the original price of 808,900 yuan.
The electric carmaker, run by billionaire Elon Musk, made another round of price cuts on the Model Y and Model 3 in China this week.
In the U.S., Tesla has introduced cheaper Model S and Model X models — this is nothing new, but the range is limited by software.
Tesla continues to focus on gaining market share and growing vehicle sales, but at the expense of profit margins. In its June quarter earnings report, the automaker reported an operating margin of 9.6%, the lowest in at least the past five quarters.
Continued discounting has investors concerned that margins may be eroded too much.
Tesla shares were down about 2% in premarket trading after falling nearly 3% on Tuesday.
Tesla’s discounts have raised concerns about a price war in the Chinese market, which could affect smaller players.Stocks in China’s EV upstart Xpeng, Nioh and ideal car U.S. premarket trade lower
The drop in prices comes as China’s economy struggles to regain stability after a period of strict Covid-19 restrictions ends, and consumers remain cautious about spending.
According to data from the China Travel Association, Tesla sold 64,285 electric vehicles made in China in July, down 31% month-on-month.
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