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Two more car companies cut prices!

2024-05-27 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)04/21 Report--

A number of models owned by Tesla have cut prices by $2000 (about 15000 yuan), according to Tesla's US website on April 20.

Specifically, the price of Model Y has been reduced to $42990 (about 311000 yuan), the price of the long-lasting version of Model Y has been reduced to $47990 (about 347000 yuan), and the price of the high-performance version of Model Y has been reduced to $51490 (about 373000 yuan). In addition, Model S fell to $72990, Model S PLAID to $87990, Model X to $77990 and Model X PLAID to $92990.

The price reduction is only aimed at the US market, not the Chinese market. Contrary to the US market, Tesla China announced on April 1 that the price of domestic Model Y will be increased by 5000 yuan. After the adjustment, the latest price of Model Y is 263900 yuan, the long-lasting version of Model Y is 304900 yuan, and the high-performance version of Model Y is 368900 yuan. At the same time, the previous existing car insurance subsidy policy of 8000 yuan and the car paint deduction policy of up to 10000 yuan will also expire on March 31. According to this calculation, including insurance subsidies, the actual price increase of Model Y is as high as 23000 yuan.

Industry insiders pointed out that after entering 2024, Tesla high-frequency price adjustment or price reduction behind means that it is facing greater growth pressure. Tesla had previously warned that car growth in 2024 would "probably be significantly lower" than in 2023. Data show that in the first quarter of this year, Tesla delivered 386800 new cars worldwide, down 8.5 percent from the same period last year and 20.2 percent from the previous month, the lowest in the past five quarters. It was also the first time that Tesla had dropped below 400000 vehicles since the third quarter of 2022. Among them, Tesla Model 3 and Model Y produced a total of 412000 vehicles and delivered a total of 369000 vehicles. Industry insiders said Tesla's delivery volume in the first quarter was much lower than even the most pessimistic analysts expected.

Or affected by the lower-than-expected delivery volume, Tesla CEO Elon Musk issued a full letter on the afternoon of April 15, announcing that Tesla will lay off 10% of its staff worldwide, the largest layoff by Tesla since 2017, with 14000 layoffs. Mr Musk said the job cuts would help "prepare the company for the next phase of growth" and noted that the company needed to carry out "radical organizational reforms" every five years or so.

In addition to Tesla's price reduction in the US market, Xiaopeng also announced a price reduction today.

On April 20, Xiaopeng Automobile official announced that from now on to May 5, 2024, it will introduce a time-limited subsidy of 500 million yuan, covering Xiaopeng G9, G6, P7i and 2024 Xiaopeng P5 models. Among them, after the subsidy of Xiaopeng G9, the current car starts at 243900 yuan; the G6 is limited to 20, 000 yuan; P7i, up to 50, 000 yuan; some cities in P5 can enjoy zero down payment and a time-limited discount of 10, 000 yuan, as well as a maximum replacement subsidy of 15000 yuan for the same brand and 10, 000 yuan for different brands.

It is worth mentioning that on April 11, Xiaopeng announced that its medium-sized SUV Xiaopeng G6 brand new 580long-range Plus model has been officially put on the market, with an official guiding price of 199900 yuan and a time-limited discount price of 179900 yuan from now until April 30. Compared with the current Xiaopeng G6 entry model, the price of the new car is reduced by 10,000 yuan, further lowering the threshold of the car. It should be noted that in February this year, the Xiaopeng G6 opened a time-limited official reduction, with a direct drop of 20,000 yuan for all models, but the price reduction failed to bring about sales growth. Retail data show that the cumulative sales of the Xiaopeng G6 in the first three months of this year were 4437, and from January to March were 1803, 1161 and 1473 respectively, a significant decline compared with the initial launch of the new car.

In fact, since the year of the Dragon during the Spring Festival, the domestic price war is very fierce, and more and more car companies begin to seize the market by way of price reduction. Under this background, the price competition among car enterprises is becoming more and more fierce, and the price of new energy vehicles is falling again and again. Since April 1, more than a dozen car companies have launched a new round of price cuts, including a "20, 000 yuan price reduction for M7" on Weibo.

"exchanging price for quantity" is one of the means for car companies to seize market share. It is worth mentioning that "price for volume" will also have a huge impact on the profits of car companies. Take Tesla as an example. In the past 2023 and 2023, Tesla cut prices in the United States, Europe, China and other markets, a move that enhanced the competitiveness of Tesla models in the car market, but also led to a decline in Tesla's gross profit margin.

As for the "price war", ideal Automobile Chairman and CEO Li he once pointed out: "whether a 'price war' can bring sales is not certain, but it will certainly hit the opponent. If the 'price war' does not use real guns, but empty rounds, then the effect will be even better." As to whether the "price war" is positive or negative for the development of China's automobile industry, Yang Xueliang, vice president of Geely, said on the social platform: "it is negative. If we want sustainable development, technology, quality, service and brand should all go up. In the end, we have to rely on the creation of value for survival and development. High value is the way out for Chinese cars to become bigger and stronger, and the road of price war will become narrower and narrower." "Automotive Industry concern" believes that the price war is a double-edged sword, a long price war will not only have a huge impact on the profits of automobile companies, but also reduce the influence of brands and reduce the stickiness of users.

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