"Can't Withstand Price War" Tesla's Humiliation, Price Cuts on All Models in China

Price Cut in the US Followed by 2.7 Million KRW Reduction in China
Q1 Sales Slump and Competition in the Chinese Market Seem to Be Factors

Electric vehicle manufacturer Tesla has lowered the sales prices of its three main models by $2,000 (approximately 2.76 million KRW) in the U.S. market and has also reduced the prices of all models in China.

According to Tesla's official China website on the 21st, the prices of all models currently on sale were reduced by 14,000 yuan (approximately 2.7 million KRW).

Accordingly, the Model 3 price dropped from 245,900 yuan (approximately 46.7 million KRW) to 231,900 yuan (approximately 44 million KRW), and the prices of the Model Y, Model S, and Model X became 249,900 yuan (approximately 47.4 million KRW), 684,900 yuan (approximately 130 million KRW), and 724,900 yuan (approximately 137.6 million KRW), respectively.

This price adjustment came shortly after the price reduction in the U.S. market. Bloomberg News previously analyzed Tesla's U.S. price cuts as a result of increased inventory due to sluggish sales in the first quarter.

Earlier this month, Tesla recorded a first-quarter delivery volume of 386,810 units, down 8.5% compared to the same period last year.

Consequently, on the 14th of this month, Tesla announced plans to reduce its global workforce by more than 10% to cut costs. The layoffs include two senior executives.

Tesla's stock price fell for six consecutive trading days from the 12th to the 19th, hitting a 15-month low of $147.05. The stock price decline this year amounts to 40.81%.

Tesla has also faced difficulties in China, where dozens of electric vehicle manufacturers are engaged in a 'price war.' The rising momentum of domestic Chinese electric vehicle brands creating a price-cutting atmosphere is another negative factor for Tesla.

Recently, Chinese leading electric vehicle brand Xiaopeng announced a subsidy policy of up to 500 million yuan for automobiles until May. In addition, major Chinese electric vehicle brands such as BYD, Aion, and Changan have all initiated price cuts since March.

Moreover, with Xiaomi entering the electric vehicle market and receiving positive responses, Tesla's challenges appear to have intensified.

Chinese media Securities Times reported, "Although Tesla showed an independent move by announcing a 5,000 yuan price increase for the Model Y earlier this month, it became unsustainable within less than a month amid global new energy vehicle competition."