automakers respond to Tesla
Tesla recently made a significant price cut in almost all markets, thus catching many competitors on the wrong foot. However, the latter are trying to respond to Tesla with price cuts and, above all, gifts for customers who cannot take advantage of them. And it starts in China.
Price volatility at Tesla is an exercise the American manufacturer has managed brilliantly for nearly a decade. The best example is the Tesla Model 3, whose price dropped by almost 15,000 euros overnight in Europe, especially in France, a few days ago, especially thanks to the reintegration of the environmental bonus into the equation.
But given the difficult economic situation, Tesla cut prices even more around the world earlier in the year, starting with China, where sales began to falter. Feel free to take a look at our special file to understand how prices are set at Tesla and why they vary so much.
Fear of Tesla in China?
Other brands create their prices year after year. These are called model years, and prices usually don’t change much in the current year. Except for Tesla, these updates usually happen in August. who sets his prices as he knowsbecause its commercial constraints and distribution network are less extensive and less complex than those of other manufacturers.
According to Asian media, in response to Tesla IT House, Chinese electric car manufacturer XPeng has significantly reduced its prices, especially dealing with an American manufacturer in China. Unless customers get used to fluctuations in Tesla, this is not necessarily the case for other brands.
So, XPeng has reduced the prices of P5, P7 and G3 SUV on January 17, 2023. With a reduction between 20,000 and 36,000 yuan, that is, between 2,700 and 4,900 euros at the current exchange rate. The drop looks less spectacular with Tesla than in Europe, but there are no more tax benefits for electric cars in China from the beginning of 2023.
Focus on unhappy customers
This price drop will obviously please customers who are planning to buy an XPeng or have recently ordered a car. but this will not be the case for those who have recently taken delivery of the car. To deal with the outcry, the Chinese manufacturer has stepped in by offering up to four years of maintenance on its car and a 10-year or 200,000km warranty to customers who recently purchased one of the models affected by the price drop.
Xpeng no doubt wanted to take the lead to avoid scenes similar to what could happen at Tesla in China, i.e. in-store demonstrations. Recently, a Tesla Cyberquad was vandalized and products were stolen due to price drops.
Remember that on Tesla’s side, if your car has not yet been delivered and therefore you have not yet paid the issued invoice, you can take advantage of the new prices. If you’ve paid the invoice but haven’t delivered the model yet, that’s still fine. On the other hand, if you recently purchased a Model 3 or Model Y at the old prices and it’s already been delivered to you, you won’t be able to take advantage of the new prices.
Is it enough to fight Tesla?
At the beginning of the year, almost all Chinese manufacturers announced price increases in China. but that’s not counting Tesla, which has misled them all by dramatically slashing their prices.. Thus, Tesla Model 3 Propulsion increased from 265,900 yuan (approx. €36,200) to 229,900 yuan (approx. €31,300), and Model Y Propulsion increased from 288,900 yuan (approx. €39,300) to 303.02 yuan.
Thus, XPeng P5 in the basic version changes from 179,900 yuan (24,500 euros) to 156,900 yuan (21,300 euros), XPeng P7 from 239,900 yuan (32,600 euros) and 209,900 yuan (32,600 euros) and G from 209,900 yuan, GG56SU (e0002). euros) to 148,900 yuan (20,300 euros). All of these prices include entry-level models, but high-end and wide-ranging trims like the Tesla are also affected by the lower prices.
A few days ago, another Chinese manufacturer called Aito also lowered prices IT House : Up to 30,000 yuan or about 4,000 euros, less in the final bill. The manufacturer also gifted customers who bought before the price cut with a longer warranty, free maintenance and free Huawei products.
It remains to be seen whether other manufacturers will follow the price war path. But it seems complicated. Tesla can afford it with its mind-blowing margins in the auto industry. Not so with other manufacturers.
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