In the view of an industry association, the significant price cuts for the Tesla Model Y in China will have a huge impact on the luxury car market, not the emerging car makers.
Cui Dongshu, secretary general of the China Passenger Car Association, argued in an article today that the Model Y price cut will mainly affect the market share of traditional luxury cars, with limited impact on new car makers such as NIO.
Cui said that after the price cut, the competition between Model Y and Audi Q5, Mercedes-Benz GLC and BMW X3 will be significantly reversed, and the price of Model Y will have certain advantages and will gain more enthusiasm from luxury car consumers.
Especially while in mega cities, Model Y should have a better a performance due to the greater advantage in licensing policy, he said.
China-made Tesla Model Y goes on sale, price from about $52,000
Cui believed that the impact of Tesla's price cut on new car makers, including NIO, is not particularly large, because Tesla's main competitors are still traditional luxury cars. The new carmakers' products have distinctive labels and more features compared to Tesla.
He wrote (translated from Chinese into English):
The current products from NIO and XPeng are longer, taller, better looking, and have more unique advantages of their own than Tesla's products.
Especially high-end brands such as NIO also have their own good quality of service recognized by consumers, and the loyalty of its user base is extremely high, I think the impact on it should not be very large.
Tesla price reduction will mainly have a huge impact on the traditional car market.
On January 1, Tesla announced that the China-made Model Y was officially on sale. According to the price announced on Tesla's official website, the long-range version and Performance version start at RMB 339,900 and RMB 369,900 respectively, a price cut of about RMB 148,100 and RMB 165,100 compared to the previous imported version.
The product page shows that some Model Y models are eligible for the China new energy vehicle purchase tax exemption, saving up to about RMB 37,000.
Tesmanian quoted sources as saying that within 10 hours of the price cut announcement, orders for the Model Y soared to more than 100,000 units.
But Boston Consulting Group Managing Director and Global Partner Yang Xu told Yicai.com, "The Model Y is a very competitive model overall and will drive demand up, but the 10-hour, 100,000 orders figure may be a bit of an exaggeration."
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