Model 3 price cut starts such a sales boom that Tesla rescinded the free color upgrade option in China
The Tesla Model 3 and Model Y price reduction earlier this week has started a veritable sales boom in China, report insiders, with some salespeople reportedly staying up to the wee hours in order to process all orders which have been received since Tesla cut prices with about 10% on Monday.
The company lowered the Model 3 and Model Y price tags in China with up to the equivalent of about US$5,000, as the order queue started thinning out just as its Shanghai Gigafactory began to manufacture the cars in record numbers after plant upgrades and the easing of pandemic restrictions there.
Besides the direct price cuts, Tesla also threw in other incentives, ranging from subsidized store-bought insurance, to a free silver color upgrade, heretofore a US$1,100 option. A few days later, and Tesla has now rescinded at least one of the buyer incentives - the gratis paint job - while it keeps the others intact to ensure the steady flow of orders coming fast and furious.
China is the world's most competitive electric vehicle market, stemming from the fact that the government has been prioritizing and subsidizing the EV and battery industries there for a good decade. There, Tesla faces stiff competition from the likes of BYD, NIO, XPeng, and countless others which often offer better and cheaper electric vehicles.
Some local EV manufacturers have also started lowering their prices, following a softness in demand and supply chain bottleneck improvements, so Tesla is not alone in the undertaking. After all, Elon Musk said that if market and supply chain conditions improve, Tesla will be correcting its "embarrassing" price levels in due course, and the company seemingly follows up on that promise, at least in China.