Automakers Tesla and BYD turned up discounts and incentives for electric vehicle buyers in China this week, amid dwindling demand in the world’s largest auto market.
On Friday, US EV-giant Tesla announced incentives worth a maximum of 34,600 yuan ($4,807.76) on some Model 3 and Model Y cars just days after slashing their prices.
That was on the heels of its Chinese rival BYD unveiling new versions of its Han sedans and Tang SUVs earlier this week with starting prices 10.35% to 14.3% lower than previous versions.
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The world’s two biggest EV-makers have been locked in a drawn-out and brutal price war in China since the beginning of last year, when Tesla announced several price cuts on its top-selling vehicles in the country.
Tesla made its move just as China ended an 11-year subsidy scheme for EV purchases in 2022, and its Chinese rivals, including BYD, quickly responded with price cuts of their own.
By the end of the year, BYD had overtaken Tesla in sales for the first time ever, a feat, analysts say, it achieved by thinning out its profit margins to keep up with the price war.
New moves from the two carmakers to woo Chinese consumers also come at a time of slowing growth in a market that accounts for nearly 60% of global EV sales.
New energy vehicle sales in China fell 38.8% in January versus the previous month. Morgan Stanley also noted last month that the global EV momentum was “stalling.”
“The market is over-supplied vs demand,” Morgan Stanley analyst Adam Jonas said in a research note.
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Discounts, insurance incentives, financing plans
Incentives Tesla announced on Friday include a 8,000 yuan discount in car insurance products with partnerships with Tesla, and a 10,000 yuan discount if the buyer chooses a change of paint.
Tesla also offered limited-time preferential financing plans that could save up to 16,600 yuan for purchases of Model Y.
The incentives are applicable on existing inventories of Model 3 sedans and Model Y SUVs until the end of March. When asked about the amount of inventory Tesla had in China, a sales representative said it was limited but declined to provide details.
Meanwhile, BYD also lowered the starting price of a new version of its Song Pro hybrid SUV by 15.4% on Friday.
BYD has introduced a slew of lower-priced EV models this month, starting with a new version of its Dolphin hatchback and newer plug-in hybrid sedan Qin Plus DM-i last week.
The automaker lowered the starting price for the Qin Plus EV and hybrid by 15% and 20%, respectively, versus price cuts of 8% and 11% respectively for the two models in 2023, Reuters calculations showed.
On the other hand, BYD has launched new brands such as Yangwang and Fangchengbao to move upmarket as well. It unveiled a sportscar U9 under the Yangwang brand on Sunday with a starting price of 1.68 million yuan ($233,353).
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