The starting price for the updated Model 3 is now 231,900 yuan, reduced from the previous 245,900 yuan, as shown on the website.
Similarly, the starting price for the Model Y has been lowered to 249,900 yuan, down from the previous 263,900 yuan.
This comes days after Tesla introduced fresh incentives in the world's largest auto market to attract consumers. These incentives included insurance subsidies, as the U.S. electric vehicle giant engaged in a prolonged price battle against established competitors like China's behemoth automaker BYD.
Amid decreasing demand and tougher competition, Tesla had reduced prices for certain Model 3 and Y cars in China in January. They also gave cash discounts for some Model Ys starting from February.
Their main competitor in China, BYD, also cut the starting price of a new version of its Song Pro hybrid SUV by 15.4% earlier. BYD, which overtook Tesla as the world's leading EV maker in Q4, responded with even larger discounts on various new car versions in February.
The U.S. electric vehicle-maker is grappling with slow demand and strong competition in China, while its first-quarter sales dropped sharply below market estimates. Tesla is dealing with tough competition worldwide, especially from Chinese electric car companies. These companies are flooding the market with cars priced as low as USD 10,000. Meanwhile, Tesla has decided not to make the affordable car they had promised. Investors were hoping for this car to help Tesla become a big car company for everyone.
Tesla Inc. stocks continued to fall in 2024, causing the value of the electric car company to drop below USD 500 billion. This drop came after the company announced job cuts recently, which spooked investors.
Meanwhile, Musk had to defer his visit to India and planned meet with Indian Prime Minister Narendra Modi. He was also set to meet with senior officials from state governments where Tesla is considering establishing an electric vehicle assembly unit. India had recently offered a new EV policy with lower import tariffs, laying out the red carpet for entry of foreign automakers such as Tesla.
Tesla's arrival in India provides a significant boost to the country's Make-in-India initiative, especially after securing another major brand like Apple for iPhone manufacturing. However, India also offers valuable opportunities to Tesla at a time when the iconic car company is facing challenges such as declining sales, falling stock prices, reduced investor confidence, and a lack of innovative ideas. This comes amid increasing competition from American and European rivals, as well as aggressive Chinese car manufacturers.
India's huge car market, with a new love for SUVs, can offer a much needed scope of growth for Tesla if it makes and sells its affordable EV here.
Although there are worries about Chinese companies flooding into India following the new EV policy, potentially posing a threat to Tesla with their more affordable electric vehicles, this scenario appears improbable. The Indian government has been actively discouraging Chinese investments, making it unlikely for these companies to dominate the market. Reuters reported last July that China's BYD informed its Indian joint-venture partner of plans to halt a new USD 1-billion investment in building electric cars due to scrutiny from the government regarding its investment proposal.
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