Lower prices should increase sales, and it appears that Tesla’s move to make price cuts in China has had the desired effect. Tesla's retail sales increased in the first half of January, after the company reduced its prices by 5.7-13.5 percent in an effort to sell more vehicles. Then the orders started flooding in and Tesla received 0,000 in just three days, according to unofficial reports. Tesla is seeing great results from its efforts, especially in light of the fact that during the time that Tesla sales was surging, average car sales in China dropped by 14.5 percent.
Tesla sold 19,346 Made in China (MIC) Model 3 and Model Y vehicles in China in January 2022, and another 40,499 vehicles were exported. Interestingly, XPeng sales have dropped 36% year over year, which may help to explain why the company just reduced prices. In an increasingly competitive struggle with brands like Tesla in the high-end EV market, Chinese electric vehicle manufacturer Xpeng has dropped the cost of several of its models in an effort to entice mainland drivers. Analysts predicted a full-fledged pricing war in the fiercely competitive market.
Xpeng announced a 12.5% price reduction on its best-selling P7 model, which will now start at 209,900 yuan (US$30,976). It cut the prices of its P5 and P7 saloons and G3i sport utility vehicles (SUVs) by 10% to 13%, claiming that the decrease in cost of production was the reason for the lower prices. The cost of the G9, a high-end SUV that debuted in October, was not adjusted by Xpeng. The price reductions would go into effect right away.
It follows closely on the heels of price reductions by Tesla and Huawei. Because consumers are hesitant to spend money on expensive things like cars due to a sluggish economy, the price tag has taken on additional significance. In an effort to compete with Tesla's Shanghai-built Model Y, Aito, a premium electric vehicle brand supported by Huawei Technologies, gave a 10% discount on the base model of its M5 SUV. The base model of the M5 is currently available for 259,800 yuan, making it somewhat less expensive than the base Model Y.
Aito M5 SUV
And then, there is BYD. In January 2022, BYD sold nearly 93,000 units, although its most recent production and sales rate considerably above 200,000 monthly. This is why news of a volume increase is not unexpected. BYD simply keeps expanding.
Tesla Still Tops
When it comes to electric cars, Tesla has grown to be nothing short of a household name, as evidenced in part by the company's market dominance. Recent data comparing automakers indicates that Tesla's current market position is dominant, despite the fact that some see rising competition as a threat to the automaker in the years to come.
In the first nine months of 2022, four of the six most popular EVs sold in the USA were Tesla vehicles. Both the Model Y and Model 3 outsold the following top-sellers by more over 100,000 units, surpassing other market offerings to become the two best-selling EVs in the nation. In the US, the Tesla Model Y sold 191,451 units from January through September, and the Model 3 sold 156,357.
The Ford Mustang Mach-E, which sold only 28,089 units, came in second place behind Tesla's top models, with the Tesla Model S (23,464), Chevy Bolt EV (22,012), and Tesla Model X (19,542) placing fourth, fifth, and sixth, respectively. The Hyundai IONIQ 5 (18,492) and the Kia EV6 (17,564) finished out the top eight to follow Tesla's portfolio and Ford's well-liked EV.
The car sector continues to struggle with supply chain problems and a severe shortage of semiconductor chips. One of the examples is that sales of luxury cars overall were down from the prior year. According to projections, Tesla will also be the best-selling luxury brand in 2022. In the US, the business had an expected 491,000 sales in 2022. The traditional premium gas car producers BMW (332,388) and Mercedes-Benz came after the electric vehicle manufacturer with 286,764.
Tesla also captured a sizable chunk of the market share in many European countries, with the Model Y landing the spot of best-seller in the UK, Norway, Iceland, Austria, Portugal, Belgium, Slovenia, and Switzerland in 2022.