Tesla has reported longer waiting times for some versions of its Model Y car in China, signalling demand for the automaker’s electric vehicles is on the rise following its decision to cut prices.
The price cuts ranging between 6% to 13.5% — announced on Friday — followed a drop in demand for Teslas in the automaker’s second-largest market.
The new prices bring the cost of some Tesla EVs closer to its top Chinese rival BYD’s best-selling models. Analysts say the move could trigger a price war between the two carmakers in the world’s biggest automobile market.
“It (the wait time) is an early indication that the price cuts are having their intended impact, which is to boost demand,” CFRA Research analyst Garrett Nelson said.
According to Tesla’s website, orders for the Model Y’s long-range and rear-wheel-drive models were delayed by a week on Monday compared to Friday. On those models, the wait time was two to five weeks as of Monday.
Meanwhile, the wait times for both Model 3 variants and the Model Y performance variant were still one to four weeks as of Monday.
Tesla’s vehicle production has exceeded sales for three straight quarters. The company has chosen to lower prices and take some additional downtime at the Shanghai factory to bring supply and demand back in balance, Nelson added.
As of Monday, Tesla had not made any adjustment to its January production plan for its Shanghai plant, with suspension of the assembly lines to start from January 20 through the end of the month, a person with knowledge of the matter said.
The company’s shares rose about 6% to close at $119.77 on Monday after losing 68% over the past 12 months. It was the most actively traded stock on US exchanges, with more than 228 million shares changing hands.
Fury over Tesla discounts
Tesla has recently offered new incentives in its markets in China, South Korea, Japan and Australia. On Monday it began offering discounts to buyers in Singapore who agreed to purchase existing inventory.
In China, the new discounts brought hundreds of protesting Tesla owners to the automaker’s showrooms and distribution centres over the weekend.
Angry Chinese owners who bought Tesla cars in late 2022 and missed out on the additional discounts demanded rebates and credit. They said the sudden price cuts meant they had overpaid for electric cars they bought earlier.
Tesla owners in China are livestreaming protest at Tesla stores. Each of them are holding garlic chives. In Chinese culture, garlic chives stand for being ripped off by big corporation or institution investors. pic.twitter.com/juNkHcK8q5
— hts (@blue_domain) January 7, 2023
The protesting Tesla owners said they were waiting for a response from the company for their demand for some kind of compensation.
A Tesla representative said on Saturday that the company has no plan to compensate those buyers for price cuts they had missed.
Some of the buyers in China said they had been led to believe that the further discounts would not be coming. Many were also looking to take advantage of a nationwide EV subsidy that expired at year end.
Online videos showed protests happening in cities including Beijing, Shenzhen, Chengdu and Xi’an. Reuters reported witnessing a protest at a Tesla facility in Shanghai.
Comments on Chinese social media were largely negative toward the Tesla buyers who have protested, with many saying online they should have understood the terms of the contract.
- Reuters, with additional editing by Vishakha Saxena