Tesla Gets Sucked Further Into China's Price War -- Here's Why It Will Succeed Anyway
Tesla is making a rare cut to its vehicle pricing in China, which could be the small boost it needs domestically to add to its export strategy.
Overview
Global automotive investors hoping that China's brutal price war would lose some steam over the summer were sorely disappointed. Not only have sales continued to plunge, sending China's vehicle market further into its slump, but a new wave of products competing on price has driven industry margins lower.
As the world's largest automotive market heads for its potential first-ever double-digit annual decline, Tesla (NASDAQ: TSLA) is finally slashing prices to try and reverse its own lengthening sales decline -- but it does have one trick up its sleeve.
Details
Tesla cut the price of its locally made Model 3 electric vehicle (EV) by 2.2%, or about $745, to a new price of about $33,160 in China. Tesla took it a step further than just a price cut, however, and threw in a $1,192 subsidy for vehicle insurance if consumers placed their orders in September. The Model Y received a slightly larger price cut of 3.8%, or about $1,490, bringing the price to $37,780.
Source
Originally published at www.fool.com.