Tesla is looking to boost demand for its vehicles in China through the implementation of new incentives for the entry-level versions of the Model 3 and Model Y.
The automaker revealed on its Weibo account late last week that those who purchase a rear-wheel drive Model 3 or Model Y from its existing inventory will be eligible for an insurance subsidy of up to 8,000 yuan ($1,113), reducing their starting prices to 245,900 yuan (~$34,150) and 250,900 yuan (~$34,800) respectively. In addition, Tesla is offering up to 10,000 yuan (~$1,389) in discounts for some of its paint colors.
The Wall Street Journal notes that Tesla’s new incentives have been introduced to help it better compete with BYD. The Chinese giant recently cut prices for some of its models by more than 10% and has also introduced several new low-priced models, both BEVs and PHEVs. In January, Tesla cut the starting price of the Model Y by 5.9% in China and the Model Y by 2.8%.
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While Tesla has cut prices in China, it has increased them in the United States. On March 1, prices of the Model Y rear-wheel drive jumped by $1,000 to $43,990 while the price of the Model Y long range was also increased by $1,000 to $48,990. These price increases come shortly after Tesla cut prices of certain Model Y variants in the U.S. during February.
In mid-February Tesla chief executive Elon Musk revealed that prices of the Model Y would be reduced by $1,000 to encourage people to buy a new car “in the middle of winter.”
“This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal,” he said of the price cuts.
