Car Prices In China Reduced By Tesla Amidst Tariff Fears


Tesla has announced that it will be reducing the prices of its Model X and Model S sedan cars that are sold in China, as it tries to absorb the hit from the ongoing trade war of Donald Trump, the President of the United States of America, with the region.

The car prices will be reduced on its top two models by up to 26 percent in order to make the cars more “affordable.” The price cuts come as the popularity of the so-called new energy cars begins in the largest auto market in the world.

The move signifies a stark change from the earlier strategy of Tesla in China. Last July, it has increased the prices by approximately 20 percent in order to account for the incoming tariffs.

Last weekend, the tensions worsened between China and the United States of America after Mike Pence, the vice president of the US, promised that the country would not be backing down from its trade dispute with China. To date, the United States has imposed tariffs on $250 billion (£194 billion) worth of goods from China. Pence declared that it “could more than double” once Beijing does not submit to its demands.

Last month, Tesla said that it had been facing a challenging environment in its newest market. It said that its costs have increased by 55 to 60 percent as a result of the tariffs.

As a response, it is expediting the construction of its gigafactory that will be located in Shanghai as the company currently imports all of its cars for Chinese buyers.

In a statement that was sent to Reuters, Tesla stated: “We are absorbing a significant part of the tariff to help make our cars more affordable for customers in China.”

Last week, the latest Model 3 launched pre-sales in China. The deliveries are scheduled to start in March or April.