Tesla China rang in the New Year with a slew of price cuts, and the effect has been both explosive and instant. One of the competitors feeling the heat is local Chinese brand BYD.
Local media Yicai published a report that pulled data from store visits, interviews, and telephone surveys. The study claims Tesla stores received 500% more foot traffic after announcing the price cuts. It also noted the increased interest was despite many others still hoping the company would further lower prices.
Citing unnamed Tesla workers, Yicai reported that the Model Y, which now starts at 259,900 yuan, is getting most of the attention from potential customers.
BYD is among the brands least affected by the surge of interest in Tesla cars. However, a BYD salesperson noted that many buyers with reservations came to the store to cancel their orders and transfer to Tesla. The most affected models are the BYD Seal and BYD Han, which compete directly with the Tesla Model 3.
However, there may be no let-up insight for companies like BYD, as Tesla may not return to the old prices. Tesla VP Grace Tao commented the new Model 3 and Model Y prices might stabilize in the current ranges.
Tao said, “In the past, Tesla has made several larger price adjustments due to external factors that have had an impact on costs. For example, when we became a domestic car(maker), the price naturally decreased compared to a pure import, at least the tariff was saved by 15%. For example, after our supply chain stabilized, it would definitely be lower than before when it was shipped from abroad. Tesla’s supply chain localization rate is now 95%, so theoretically, there is not much room for improvement. Therefore, I think after this price adjustment, the price should be relatively stable.”