Tesla’s price cuts in China have seen customers storm stores to demand compensation

Elon Musk’s gamble on slashing Tesla Prices in China may have backfired in part because angry owners protested the sudden loss of value of their new vehicles over the weekend.

Feeling the heat from the local rival BYDTesla lowered the entry point for its two main model lines on Friday to attract customers back to showrooms and building his depleted order book.

The move worked, but not entirely for the reason intended.

A mob of angry Tesla customers has reportedly shown up at several Tesla showrooms across the country demanding some form of compensation for the purchase of a new car at an older, higher price.

A protest though there was even a part organized by none other than an employee from Tesla’s biggest competitor.

A man who introduced himself on a Chinese social media site Weibo as “Wang Xingguang” acknowledged that he participated in a protest at the Tesla dealership in Xi’an, Shaanxi province. He admitted that he was there in a personal capacity, not as a BYD employee.

Believable or not, his confession only inspired more rejoicing in the Tesla community, because he revealed that he was there for his wife. A Tesla customer herself, she apparently prefers Musk’s cars to those made by her own husband’s boss.

“I defend the rights and interests of my family, which is a personal act and has nothing to do with the company I work for,” he posted on Weibo. “As a family member of the car owner, can’t I protect my rights?”

With legacy automakers shifting much of their attention to their bread-and-butter combustion engine business to the detriment of their less profitable EV models, China’s BYD has emerged as one of its biggest competitors. in Tesla.

The carmaker is not as well known around the world as other main competitors like General MotorsFord or Volkswagenbecause BYD has just started selling cars outside of China.

BYD’s car sales in China doubled that of Tesla and then some last year, although the initial profit per unit was not as high due to the lower average selling price.

Why is Tesla cutting prices?

The price cuts, Tesla’s second since late October, have been the subject of intense debate because of Musk’s continued fears. amazing growth story began to take water as production began to exceed demand.

the last time Musk lowered the starting price of his cars, the stimulatory effect was short-lived.

While weekly unit sales tripled to 16,000 by the end of November, they dropped to just 4,338 into the new year.

So far, the new cuts seem to have spurred some better demand in the world’s largest EV market, but only for some Model Y crossovers.

Waiting times for an entry motor version and the range-topping dual motor variant are now available extended by 2-5 weeks.

Every other model built in China continues to have the same 1-4 week wait times as before. In the past, customers in China may not have received their new Tesla car for months.

NEwS A price war sent shares of Chinese EV makers tumbling on Friday and even briefly pushed Tesla stock to a new two-year low.

The bulls argue that Tesla’s automotive gross margin of around 30% gives it the leverage to withstand an escalating price war longer than less profitable competitors including BYD.

They cited comments for example from Tesla official Grace Tao, who posted on her Weibo account on Friday that the cuts would not dilute margins because they could be offset by “many engineering innovations.”

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