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New energy vehicle price war in China Market

Published: 1.24.2024

On January 1, 2024, Tesla announced a price reduction cut in the Chinese market with an insurance subsidy of 6,000 CNY for Model 3 rear-wheel drive existing cars and launched a low-interest financial policy. 


The maximum price for purchasing Model 3/Y for a limited time can save 23,000 RMB. Less than two weeks later, on January 12, the price of the Tesla Model 3 rear-wheel drive refreshed version dropped from 259,900 CNY to 245,900 CNY; the price of the Model 3 long-range refreshed version Decreased by 11,500 CNY 


Vaibhav Taneja, Tesla's chief financial officer and chief accounting officer, stressed that the company remains "unwavering" in its "pursuit of further cost reductions in 2024," which involves engineering and factory operations. 


In addition to Tesla, many car companies have introduced various preferential policies since this year, and some even directly cut prices. 


According to statistics from the China Association of Automobile Manufacturers, in 2023, China's local automobile production and sales will total 30.161 million units and 30.094 million units, a year-on-year increase of 11.6% and 12% respectively. Production and sales hit a record high, achieving double-digit growth. 


As the market continues to mature, China's new energy vehicle production has ranked first in the world for nine consecutive years. Under the dual effects of policies and markets, new energy vehicles will continue to grow rapidly in 2023.  


China's new energy vehicle production and sales will complete 9.587 million units and 9.495 million units respectively, a year-on-year increase of 35.8% and 37.9% respectively. The market share will reach 31.6%, a high 5.9 percentage points over the same period last year.  


Among them, the production and sales of new energy commercial vehicles accounted for 11.5% and 11.1% of commercial vehicle production and sales respectively; the production and sales of new energy passenger vehicles accounted for 34.9% and 34.7% of passenger car sales respectively. 

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