Electric car manufacturers cut prices amid fierce competition: Tesla shares fall by 3%
Kyiv • UNN
Tesla and Chinese electric car makers such as Li Auto have cut prices amid fierce competition, including in the Chinese electric car market.
Shares of American Tesla fell 3% in pre-market trading, and China's Li Auto lost 8% of its value, to an 11-month low, as electric car makers cut prices in response to intense competition. Writes UNN with reference to CNBC.
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US electric car leader Tesla has cut the starting price of its Model 3 in China to 231,900 yuan ($32,000) this Sunday, a 14,000 yuan reduction, according to Reuters. According to the report, the company also made price cuts in other major markets, including Germany.
At the same time, Chinese electric vehicle manufacturer Li Auto announced price cuts for its models, including the L7, L8, L9, and the recently launched Mega SUV, according to a post on their Weibo account on Monday. It is noted that the price reductions for individual models reached up to 30,000 yuan.
On Monday's trading session, shares of Li Auto listed in Hong Kong fell by 8.3%, hitting their lowest level in 11 months, while shares of other Chinese electric vehicle manufacturers also showed a decline: by 1.7%, 1.9% and 0.2%.
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The drop comes amid intensifying competition in the electric vehicle industry in China, where local automakers are trying to outpace the American giant Tesla. Eugene Xiao, head of China equity strategy at Macquarie Group, said in a research note that the main goal of all leading Chinese electric vehicle manufacturers is to take the lead from Tesla, describing this process as the most competitive period in the domestic automotive market in modern history.
Xiao added that price discounts are just one aspect of the various strategies that major players in China's EV market are using to survive the "upcoming wave of industry consolidation.
Chinese smartphone maker Xiaomi launched its SU7 electric car earlier this month for about $4,000 less than the Tesla Model 3. The company also said that the new car will have a longer range.
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