Arthur J. Villasanta – Fourth Estate Contributor
Hawthorne, CA, United States (4E) – Tesla, Inc will make significant price cuts to the electric cars it sells in China in a bid to sell more cars to offset the pain caused by Trump’s trade war on China.
CEO Elon Musk announced his company will slash prices of its price of its Model X and Model S sedans by 12 percent to 26 percent to make the cars more “affordable.” Analysts said Musk’s move makes sense sales of electric cars, also called new-energy, are rising fast in China.
The price of Tesla’s newest electric car, the Model 3 car, will now start from $77,928.83 for a dual motor all-wheel drive version. The performance version will cost $85,800.
Tesla previously lowered prices on its models in China in May, after China said it would cut import tariffs for all auto imports. Oddly, Tesla in July increased the prices of its electric cars, making it one of the first U.S. carmakers to raise prices in response to tariffs. It boosted prices on its Model X and S cars by about 20 percent and saw sales drop sharply thereafter.
The new price cut also means Tesla is willing to take more of a hit from Trump’s tariffs instead of losing sales and market share. Tesla’s market move comes amid punishing trade tensions between China and the United States, which shows every signs of worsening once the next round of U.S. tariffs kicks-in on Jan. 1, 2019.
“We are absorbing a significant part of the tariff to help make our cars more affordable for customers in China,” said Tesla in a statement.
Last month, Tesla said it was facing major problems selling cars in China due to retaliatory Chinese tariffs. Its long-term response was to accelerate investment in its first overseas Gigafactory in Shanghai.
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