Tesla, Chinese EV makers jump in price war AGAIN

Tesla, the U.S. leading electric vehicle maker that initiated a price war at the beginning of the year, is now dragged into another mix that Chinese peers start in August.

The EV leader announces on Monday to cut prices by 14,000 yuan ($1,934.58) for some Model Y versions starting Aug. 14. The Model Y Long Range's starting price drops 4.5% to 299,900 yuan and the starting price of the Model Y Performance is now 349,900 yuan, down 3.8%.

Sales of Tesla's China-made vehicles fell 31% in July from June, according to China Passenger Car Association (CPCA).

It is not the first time for Tesla to trim prices this month. The automaker was reported to slash prices by up to 12% on multiple variants of its Model 3 and Model Y vehicles in Hong Kong from Aug. 4.

This price reduction follows notable price decreases recently declared by rival automakers, such as Volkswagen’s China joint venture and Geely’s premium brand.

Earlier this month, SAIC-Volkswagen announced the reduction of its ID.4 crossover’s entry-level list price to RMB 144,000, signifying a cut of nearly RMB 52,000 during the period of August 1-31.

Geely’s high-end EV brand Zeekr declared a 10% price reduction for its 001 hatchback sedans until year-end from August 11. This is the first time when Zeekr directly axes its car prices.

Leapmotor, a Zhejiang-based smart EV company, offers a Summer coupon to cut prices for its two flagship models by up to RMB 20,000 yuan ($2,800) in response to increasing competition.

In addition to price cuts, car makers also provided other incentives for customers. Electric car brand Nio offers 30 coupons for battery swap services and cuts charging fees by up to RMB 2,700 yuan ($370).

As Tesla follows the price cuts, shares in Chinese EV rivals fell on Monday as investors weigh the price war is cutting deeper into the carmakers’ margin and sales.

Leapmotor plunged 6% in Hong Kong, while Nio and XPeng both sank 3%. BYD, the world’s largest seller of plug-in hybrid EVs and battery EVs, dropped 6% in Hong Kong. $XPEV(XPEV) $NIO(NIO)