Tesla slashes price of Model X in China after tariff cuts
Beijing — Tesla has slashed up to $14,000 off its Model X in China after Beijing announced major tariff cuts for imported cars, a potential sales boost for the US firm as the world’s largest car market pivots towards electric cars.
The carmaker would lower prices of its Model S and Model X cars by just over 6%, a Beijing-based sales representative told Reuters on Wednesday.
China said on Tuesday that it would cut import tariffs for cars to 15% from 25%, a fillip for premium car brands like Tesla and BMW that export a significant number of vehicles.
Tesla said on Tuesday that any of its cars sold in China would be subject to adjusted prices, even before the tariff change came into effect on July 1.
The price of a top-of-the range Model X will be cut to 1.3-million yuan ($203,830) but that remains well above the $140,000 cash price-tag before savings for the priciest version in the US — Tesla’s Model X P100D.
The move by the California-based electric carmaker is likely to foreshadow wider price cuts for imported cars in China as foreign firms look to narrow a price gap with domestic rivals.
Imports, however, only make up a fraction of the overall market and tend to be upper-end models.
Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said price cuts by foreign premium brands were likely to force them to adjust the price tag for vehicles they produced locally in China. This in turn will gradually affect the price of more affordable, mainstream cars — even local Chinese brands.
"With imminent price adjustments in the higher-end segment, that will over time lead to a pricing adjustment for the entire market," Zhang said.
Other carmakers, including Japan’s Toyota and BMW, said after the tariff cut that they would look at adjusting their retail prices in China to provide competitive offers to consumers.