Tesla owners in China have been protesting the company’s decision to cut prices on its electric vehicles (EVs) for the second time in three months. The protesters, who are recent buyers of Tesla cars, are demanding refunds for the vehicles they purchased prior to the announcement of the price cuts on Friday. Here are the details…
Tesla owners in China protest price cuts as delivery times extend on higher demand
According to the latest reports, the new price cuts saw the Chinese-made Model 3 fall by 13.5%, which now starts at $33,515, and the Model Y cut by 10%, which now starts at $37,899. The protesters reportedly purchased the cars just before the end of 2022 in order to take advantage of expiring government subsidies for EVs.
The demonstrations took place at Tesla showrooms in locations such as Shanghai, Beijing, and Chengdu. In Chengdu, the protesters reportedly shouted “Return the money, refund our cars.” A Tesla China spokesperson told the press that the company is not planning to compensate new buyers who took delivery before Friday’s price cut.
The price cuts, which were also implemented in Australia, Japan, and South Korea, are reportedly driving new demand for Tesla vehicles in China. The company’s China website shows that the waiting times for both the rear-wheel drive and long-range versions of the Model Y are a week longer after the price cuts, with delivery wait time for these versions pushed to two to five weeks.
However, the wait time for all Model 3 versions and the Model Y performance edition remains at one to four weeks. The extended wait times in China are seen as a bullish sign on the street, but Wedbush analyst Dan Ives predicted that more price cuts would be needed in China in order to boost demand.
“The major worry now overhead for Tesla is that the demand story especially out of China is showing heavy cracks in the armor at a time that EV competition is steadily increasing domestically with NIO, BYD, Xpeng, and others fighting for a smaller pie with the Chinese consumer weakening,” Ives wrote on January 4th. “With China representing 40%+ of the global growth story for Tesla this is a heavy concern for the Street which will likely result in more significant price cuts over the coming months to spur demand as a potential pricing war takes place to gain market share in a darker macro backdrop.”
With the Chinese market being one of the most important markets for Tesla, this recent development is something to be watched closely. As production for the Chinese New year is approaching (January 22) and Tesla has an extended break for Giga Shanghai, the company needs to make sure they can strike the right balance to keep the demand high but also to keep customers satisfaction intact.
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