Pedestrians passing a Tesla store in Shanghai, China, March 14, 2024.
CostPhoto | Nuphoto | Getty Images
You’re here stocks fell in premarket trading Monday, while Chinese stocks Li Auto fell to an 11-month low, after both companies slashed prices of their electric vehicles in various markets amid intense competition.
US electric vehicle giant Tesla on Sunday reduced the starting price of its Model 3 in China to 231,900 yuan ($32,000), a reduction of 14,000 yuan, as reported by Reuters. The report also states that the group has reduced prices in other major markets, such as Germany.
At the same time, Li Auto has reduced the prices of its models, including the L7, L8, L9 and the new MEGA SUV, it announced on its Weibo account on Monday. Discounts for the models are said to have reached 30,000 yuan.
CNBC’s checks Monday of Tesla and Li Auto’s websites showed their vehicles were listed at the updated prices.
Shares of Hong Kong-listed Li Auto fell 8.3% to an 11-month low during Monday’s trading, while shares of other Chinese electric vehicle makers also fell — Nio was down 1.7%, Xpeng 1.9% and BYD down 0.2%.
The price cuts come at a time when competition in China’s electric vehicle sector has intensified, with local automakers scrambling to outdo U.S. rival Tesla with sophisticated technologies and competitive pricing.
Eugene Hsiao, head of China equity strategy at Macquarie Group, said in a research note over the weekend that all of China’s biggest electric vehicle makers have one goal in mind: “taking the crown from Tesla,” while noting that it is the most competitive national manufacturer. automobile market in recent history.
Hsiao said the price cuts were just one facet of a variety of strategies that China’s big EV players are using to survive “the next wave of industry consolidation.”
Chinese smartphone maker Xiaomi launched its SU7 electric car earlier this month, and it’s priced about $4,000 less than Tesla’s Model 3. The company also claimed that the new car will have a longer range.
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