Tesla's Consecutive Price Cuts Have Led To A Resurgence Of Price Cutting Trends Among Car Companies

Recently, Tesla has repeatedly lowered prices, and the "price war" among car companies has quietly resumed. On August 16th, Tesla announced another price reduction, further lowering the current prices of the all-new Model S/X. Users can enjoy discounts ranging from 54000 yuan to 70000 yuan when purchasing a car. Among them, the current model S starts at 754900 yuan and the current model X starts at 836900 yuan.

On August 14th, Tesla announced a price reduction, adjusting the starting price of the Model Y Long Range Edition from 313900 yuan to 299900 yuan, and the Model Y High-Performance Edition from 363900 yuan to 349900 yuan.
In fact, before Tesla's price reduction, several new energy vehicle companies had announced price reductions and promotions, and a small-scale "price war" wave had resurged. Car companies such as Zero Run, Nezha, and Geely all launched "price reductions and promotions". Behind the price reduction promotion, there is increasing pressure from car companies. Industry insiders have stated that in the past two years, the traditional golden nine silver ten no longer exists in the car market, and the growth of the car market is sluggish. It is expected that more brands will participate in the price reduction in August.

Tesla joins the price reduction army

In August, a wave of new energy vehicle "price reduction" quietly arrived.
Tesla has once again joined the price reduction army, bringing this "price war" to a climax. Not only has the Model Y been reduced by 14000 yuan, but the all-new Model S/X can enjoy discounts ranging from 54000 yuan to 70000 yuan in current car prices. From now until September 30th, you can order and deliver the Model 3 rear-wheel drive version of the current car, and purchase corresponding car insurance through a cooperative insurance institution. Users can enjoy an insurance subsidy of 8000 yuan. The welfare policies such as "winning referral rewards" and "FSD limited time transfer" for the entire range of Tesla S3XY models are still ongoing.
Regarding Tesla's two price reductions within three days, some industry insiders believe that Tesla is accelerating capacity expansion and choosing price reductions to drive sales growth in order to improve capacity utilization. On the other hand, the Model 3 new model is about to be launched, reducing inventory through price reductions.
The launch of the Tesla Model 3 has been widely circulated in the industry, with relevant media reporting that stores have started accepting orders for the new Model 3, suspected of ordering the new car at the current price, with a deposit of 1000 yuan, and offering two purchase options. The new Model 3 model will be officially launched within August, and production of the current Model 3 model will be discontinued on August 14th. However, Tesla officials have stated that it is untrue news.
If the current car price orders for the new Model 3 come true, it will also bring greater sales pressure to the car market. Under the wave of the "price war", independent brand car companies have joined in and started a new round of price competition.
On August 1st, Zero Run Motors announced an adjustment to the prices of some models of Zero Run C11 and Zero Run C01, with a maximum reduction of 20000 yuan. On August 5, the price of the 2022 Nezha S models was reduced by 30000 yuan, and the "Qixi Price Setting" activity was also launched. The price of several models was reduced by 26000 to 49000 yuan, and the car owners who participated in the promotion could also enjoy 8000 yuan of financial discount or replacement subsidies.

On August 11th, Geely's new brand, Geely Krypton, announced a limited-time price equity policy for Krypton 001, with a price reduction of 30000 to 37000 yuan and a minimum price of 269000 yuan.
The Euler brand under Great Wall Motors has launched a limited-time discount. From August 1st to 31st, the Euler Good Cat/Good Cat GT will receive a discount of 22000 yuan, with a starting price of 107800 yuan after the discount; Lightning Cat offers a discount of 30000 yuan, with the latest selling price starting from 159800 yuan. Chery New Energy has also introduced subsidies, with a maximum subsidy of 10000 yuan for the three models of the Little Ant, QQ Ice Cream, and Infinite Pro.
At the same time, car companies also disguised "price reductions" through promotional activities or the release of new models. On August 3rd, Ideal Automobile released the Ideal L9 Pro, with a nationwide retail price of 429800 yuan, a decrease of 30000 yuan compared to the L9 Max.
Not only do domestic brands lower prices, but this "price war" has also begun to roll over to joint venture brands. In August, SAIC Volkswagen lowered prices for 10 models, including gasoline and new energy vehicles, by a maximum of 60000 yuan. Among them, the Touareg series had the highest discount, with the 2023 Touareg and the all-new Touareg X offering a premium of 60000 yuan. The Lavida New Sharp, which has been on the market for just over a month, has also reduced its price for a limited period of time, offering a maximum discount of 20000 yuan.

Increased sales pressure

From the beginning of the year, Tesla took the lead in lowering prices, triggering multiple car companies to follow up, to the joint subsidy in Hubei, triggering a wave of price cuts, and this "price war" was a raging event. Why is the price war between car companies escalating again during the summer vacation?
The most intuitive thing is still sales volume.
Data shows that many car companies in the first half of the year have not yet achieved their sales targets for more than half of the year, which also puts great pressure on sales in the second half of the year. In the traditional off-season of August, in order to further boost sales and achieve this year's sales targets, car companies can only increase promotion efforts and achieve volume for the price.
For example, Zero Run Motors has proposed a target sales volume of 200000 units in 2023, with sales from January to June only reaching 44500 units, achieving only 22.25%. Geely Motors has a target sales volume of 1.65 million units this year, with sales of 694000 units in the first half of the year, achieving only 42.06%. Great Wall Motors has a target sales volume of 1.6 million units, with sales of 519200 units in the first half of the year, achieving only 32.45%, which has invisibly led to car companies being forced to "promote".
In an interview, automotive industry analyst Liu Hao stated that in the past two years, the traditional golden nine silver ten no longer exists in the car market, and the growth of the car market is sluggish. Faced with sales pressure, even in the off-season, we need to find ways to boost sales. It is expected that more brands will participate in the price reduction in August.
Liu Hao stated that many regions have launched automobile consumption promotion activities, and it is expected that more consumption promotion policies will be implemented in August. With the upcoming 818 Car Festival and Chengdu Auto Show, multiple new cars are being intensively launched, and car companies are lowering prices at this time, which can reduce costs and achieve better promotional effects.
Similarly, car companies' "lowering prices" and increasing promotional efforts are also further responding to consumer promotion policies and driving car consumption.

Since the beginning of this year, the country has repeatedly introduced measures to promote consumption, vigorously promoting automobile consumption. On July 21st, the National Development and Reform Commission and other departments issued the "Several Measures to Promote Automobile Consumption", proposing to optimize the management policy of automobile purchase restrictions, encourage restricted areas to issue annual purchase targets as soon as possible, promote the exchange of old cars for new ones, facilitate second-hand car transactions, continuously reduce the cost of purchasing and using new energy vehicles, and strengthen the construction of supporting facilities for new energy vehicles.
Continuously reducing the cost of purchasing new energy vehicles will also further unleash consumption potential. Chen Feng, an associate researcher at the Modern Industry Research Institute of the Guangzhou Academy of Social Sciences, stated that continuously reducing the cost of purchasing and using new energy vehicles, continuing or optimizing policies such as tax exemptions for new energy vehicle purchases, will further enhance consumers' willingness to purchase environmentally friendly new energy vehicles.