Tesla seems to be losing ground in the world’s largest auto market as it keeps offering discounts just to sell its electric vehicle offerings.
Tesla’s current discounts for the Chinese customers
CnEVPost reported that Chinese customers can now get a further discount of RMB 6,000 ($860) when they buy a Tesla EV in the automaker’s inventory. That said, it would not apply to the customized models displayed on the Tesla website.
In addition, they will still get an RMB 4,000 ($573) insurance subsidy launched last month.
Tesla’s WeChat sales posts further revealed the following discounts for selected models apart from those mentioned above:
- an RMB 11,088 national purchase subsidy
- an RMB 10,000 fuel vehicle replacement subsidy from the Shanghai government
- and 20,000 points redeemable for 5,000 kilometers of supercharging miles
Why Tesla seems to exert extra measures to clear its inventory?
Numerous canceled orders and overproduced electric vehicle units are common for automakers like Tesla and other Chinese startups (NIO, XPeng Motors, and Li Auto). These companies follow a build-to-order strategy without a sufficient guarantee that those orders will actually turn into sales.
China Merchants Bank International’s (CMBI) data revealed that Tesla’s Shanghai facility produced 87,706 Model 3 and Model Y vehicles in October. However, it only delivered 71,704 vehicles, leaving 16,002 cars produced in China in the inventory.
Since Tesla’s Shanghai facility launched at the end of 2019, this is the widest discrepancy between production and sales.
Tesla’s previous efforts to boost sales in the Chinese market
Tesla has recently been providing ways to cut its prices for Chinese buyers. The American automaker offered the following price cuts on its vehicles:
- Price cuts for all Model 3 and Model Y models to about RMB 300,000 on October 24 to qualify for the NEV purchase discount in China that is set to end this year
- RMB 8,000 discount for Model 3 or Model Y buyers that received delivery between November 8 and November 30
- RMB 4,000 discount for Model 3 or Model Y buyers that received delivery between December 1 and December 31
Based on Tesla’s released figures on December 5, the company sold a record number of vehicles in November that are built in Tesla Giga Shanghai in China: 100,291 units. In addition to producing cars for Chinese customers, Tesla’s Shanghai plant serves as its main export hub.
Tesla has undoubtedly been shaped to overcome any obstacles over the course of its years in the auto business. It is remarkable that America’s leading automaker was willing to provide numerous incentives and discounts to increase sales in the Chinese auto market.
Well, this should not come as a surprise because there are currently new automaker startups in the nation that provide less expensive options.
