Tesla cuts Model 3 and Model Y prices in the world's most competitive EV market by nearly 10% and offers free colors
Tesla may not only be done with raising the Model 3 and Model Y prices in China, but actually lowered them just as analysts were suggesting when it started offering buying incentives last month and closing expensive mall showrooms. For the first time, Tesla cut the Model 3 and Model Y prices in the world's largest and most competitive market for electric vehicles on softening demand.
Alternatively, Tesla may be feeling the price pressure of the numerous Chinese EV companies, including its biggest competitor BYD which just recently revealed the Seal sedan there at a price lower than the Model 3 but with an innovative blade battery.
The Model 3 now starts from the equivalent of US$36,727, down from $38,537, while the Model Y price was reduced to $39,777 from $43,631, a rather significant, nearly 10% decrease. When the news broke, Tesla's shares fell several percentage points in pre-market trading, as China is one of its most important single markets and Tesla just reached a record amount of deliveries from its Shanghai Gigafactory.
With the base RWD Model Y price cut, it now qualifies for the Chinese government subsidies which are given to electric vehicles in the sub-300,000 yuan range. Moreover, Tesla introduced another stealth Model Y price decrease, in addition to the extra insurance incentives, by offering the heretofore paid silver color for free. So far, only the black Model Y paint was gratis in China, while the silver models which came out of Giga Shanghai used to cost US$1,100 more.
The top dual-motor AWD versions of the Model 3 and Model Y also got the same 9% and change price cut as their cheaper versions, while Tesla keeps reminding its Chinese customers that the government's incentives will end this year, and any vehicle registered after December 31 won't get subsidies.
Elon Musk is on record saying that Tesla's car prices are at "embarrassing levels" and at the time he added that "this is not a promise or anything, but I’m hopeful that at some point we can reduce the prices a little bit." That little bit seems to be a nearly double-digit direct Model 3 and Model Y price cut, starting from China, plus some indirect buying incentives.