Tesla price cut comes as BYD calls for global EV domination

Tesla is not done cutting prices in order to remain competitive in the cutthroat Chinese EV market as it just lowered the Model Y tag by the equivalent of US$1,900 there, and continued a Model 3 insurance incentive for next month as well. Lowering the prices of its Model Y LR and Performance versions comes hot on the heels of a July sales slump for Tesla in China, just as its local competitors BYD, XPeng, or NIO, notched shipment increases.

Granted, some of the Tesla sales slowdown can be attributed to idling the Shanghai Gigafactory in preparation for an output increase as the Model 3 Highland redesign nears its mass production stage. Still, local EV manufacturers followed Tesla's earlier reductions with several rounds of price cuts, while a direct competitor like BYD saw the sales of its Dolphin sedan surpass those of its Model 3 equivalent.

It's a challenge for Tesla to battle with BYD which is a vertically integrated manufacturer that makes its own batteries, and a very competitive one at that. Recently, its CEO issued a rallying cry towards all the major carmakers in China to ramp up their global export efforts and "demolish the old legends" of the automotive industry.

While the likes of BYD, NIO, or XPeng may never be given access to the US market, they have taken more than a foothold in Europe and Asia. Despite that export pricing may be double what their cars go for in China, they are steadily winning market share with high quality electric cars sold at lower prices than their local competition whose EVs are often subpar in terms of specs and features.

According to BYD's chairman Wang Chuanfu during a pep speech last week, "it's an emotional need for the 1.4 billion Chinese people to see a Chinese brand becoming global." His video presentation ended with the rallying cry to "demolish the old legends and achieve new world-class brands, Chinese Autos."

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