Car Prices Drop Over 20% in Months
Existing Owners Demand "Refunds and Compensation"
When the American electric vehicle company Tesla implemented a price cut in China, existing Tesla owners flocked to stores in large numbers, causing disturbances. The existing owners demanded refunds or appropriate compensation measures, arguing that they had paid higher prices for their cars.
According to major foreign media including Reuters on the 8th (local time), protests demanding price reductions and compensation by Tesla owners took place at Tesla stores and showrooms across China, including Beijing and Shanghai. They claimed they suffered losses as vehicle prices dropped within just a few months.
Photos and videos of the protests quickly spread through Chinese social networking services (SNS) such as Weibo. In the videos, public security officers are seen arriving at the scene to disperse the agitated crowd. In Chengdu, owners gathered in front of a store shouted slogans such as "Give me back my money" and "Refund the car."
Tesla China reportedly has no plans to provide separate compensation to recent car buyers.
This turmoil arose as Tesla responded to declining demand in the Chinese market by implementing additional price cuts.
Recently, Tesla announced on its website that it would reduce the sales prices of the Model 3 and SUV Model Y in China by 6 to 13.5%. This is another price cut following one in October last year.
For the Model 3, the lowest price dropped from 265,900 yuan (approximately 49 million KRW) to 229,900 yuan (approximately 42.44 million KRW), and for the Model Y, from 288,900 yuan (approximately 53.34 million KRW) to 259,900 yuan (approximately 47.99 million KRW).
Compared to the lowest US market price of the Model Y at $65,900 (approximately 83.69 million KRW), the price in China is 43% lower, marking the largest price gap ever.
On the 7th, existing car owners gathered at the Tesla showroom in Chengdu, China, to protest the recent price cuts. The global price of the Model Y varies by country but is generally around $60,000 (approximately 76.19 million KRW), and in Korea, it is sold for 84,999,000 KRW.
Tesla’s price cuts are a response to decreased demand, such as new car deliveries produced in China dropping 44% month-on-month and 21% year-on-year to 55,796 units in December last year.
Grace Tao, Vice President of Communications at Tesla China, emphasized on Weibo that "this price reduction reflects engineering innovations" and "responds to the Chinese government’s call to promote economic development and consumption."
Meanwhile, JP Morgan has predicted that the Chinese market will experience a "painful transition period," with sales of electric vehicles and plug-in hybrid electric vehicles (PHEVs) in January and February expected to decline by 40 to 60%.
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