Tesla has increased the starting price of its Model Y crossovers in China, after the company’s aggressive price cuts at the beginning of the year ignited an electric vehicle (EV) price war.
The EV-maker raised the price for the rear-wheel drive version of the Model Y by 0.8% to 261,900 yuan ($38,577.11), according to the price information listed on the company’s Chinese website on Friday.
Tesla kept the prices for other versions of Model Y and the Model 3 cars unchanged.
Tesla’s aggressive price cuts earlier this year helped it to stoke demand amid rising inventories.
The US automaker announced plans to step up output at its Shanghai plant over the next two months to meet the jump in demand.
Tesla’s market share in China’s battery electric vehicle (BEV) sector rose to 12.5% in January from 9% in December, according to a Reuters calculation based on industry data.
China car sales plunge
Meanwhile, China’s passenger car sales slumped 38% in January, reversing a 2.4% gain in the previous month, according to industry data.
Sales of new energy cars that include pure battery EVs and plug-in hybrids also fell 6.3% in January after a blistering 90% growth in 2022, the China Passenger Car Association (CPCA) said.
Demand weakened after a tax cut on combustion engine cars and state subsidies on electric vehicles (EV) expired.
Despite signs of easing demand in the world’s largest car market, China’s central government did not extend a 50% purchase tax cut on combustion engine vehicles when it expired at the end of December.
It also decided to end a more than decade-long national subsidy for EV purchases. That forced automakers including Tesla to defend their market shares with greater discounts, igniting the EV price war.
- Reuters, with additional editing by Vishakha Saxena