Tesla cuts prices for Model 3 and Model Y cars in China

Tesla’s Model 3 и Model Y cars are expected to see a price cut, bringing the starting price of vehicles down by 9%. 

The company came up with the decision after Tesla CEO Ilon Musk said last week that "a kind of recession" in China and Europe had led to a decline in the demand for electric cars.

According to the representatives of the company, they are adjusting prices according to costs. Capacity utilisation at the Shanghai Gigafactory has increased, while supply chains have achieved stability, despite the impact of strict COVID restrictions on China's economy, causing reduction of costs. 

Analysts at China Merchants Bank International (CMBI) believe that more competition in the electric car market will be seen in 2023. According to them, sales of electric cars and hybrids may go down.

As reported by Shi Ji, a CMBI analyst, the price cut indicates the possible price war that has been the topic of discussions since August. It is expected given Tesla's Q3 capacity expansion. CMBI analysts assume that other new-energy vehicle manufacturers will follow the lead of Tesla, as production capacity for such vehicles in China is to boost significantly in 2023.