Tesla Launches Stripped-Down Models in China Amid Price war,Faces Skepticism
SHANGHAI – tesla announced Tuesday the release of more affordable “standard” versions of its Model Y and Model 3 for the Chinese market,omitting features like leather seats,a radio,rear passenger screen,and the “Autosteer” function within its Autopilot system. The Model Y standard version will start at $39,990, while the Model 3 standard version is priced at $36,990 – roughly $5,000, or 10%, less than their “premium” counterparts, wiht availability beginning next month.
However, the move has been met with mixed reactions from Chinese consumers online. A post on the popular social network Weibo questioned the value proposition, asking, “The beggar version of the Tesla model costs 230,000 yuan. Will you buy it?”
Other users expressed a preference for domestic electric vehicle options. ”I will certainly not buy them. For the same price, I have a lot more options from local producers,” one comment read. Another user suggested, “With another 10,000 RMB, I can buy a Li i6. Wouldn’t that be a better deal?” referencing the electric SUV from Chinese manufacturer Li Auto. Despite the skepticism, some anticipate the lower-priced models will still find buyers, with one user commenting, “Many will say they are not interested, but Tesla could sell a lot of such cars.” Another stated, “I would like one very much, but I can’t afford it.”
The launch comes as Tesla navigates an increasingly competitive pricing war in China’s electric vehicle market, involving approximately 100 manufacturers. Last year,Tesla reduced prices on its Model 3,S,X,and Y vehicles by 14,000 yuan (approximately $1,930). BYD, Tesla’s primary Chinese competitor, has also aggressively lowered prices, impacting its profit margins, as noted in its August financial report which cited “excessive marketing” and high discounts as factors affecting “short-term profitability.”
Tesla CEO Elon Musk acknowledged the price barrier to EV adoption during a july investor teleconference, stating, “The desire to buy the car is very high, except that people do not have enough money in their bank accounts to buy it. Literally, this is the problem.Not the lack of desire, but the lack of possibility.So, the more we can make the car, the better.”
tesla’s sales in China have been declining; the company sold 129,000 cars in China during the second quarter of 2024, a nearly 12% decrease compared to the same period last year, according to data from chinese car manufacturers.
