Tesla Buyers In China Protest Price Cuts, Demand Refund

Chinese buyers of Tesla electric cars are protesting after the company announced price cuts recently to boost sales amid weak deliveries.

Hundreds of clients, who bought vehicles late last year, gathered in Tesla showrooms and delivery centers in the country demanding refund of the price difference.

Last week, the luxury electric car maker had announced reduction in prices for its Model 3 and Model Y vehicles in China, Tesla’s biggest international market, as well as the world’s largest car market.

Tesla’s least expensive vehicle on the market, Model 3, will now cost about $33,427 in China, down from the previous price of $38,704. The Model Y is now priced at $37,830, compared to $42,051 earlier.

The price cut comes for the second time in less than three months. In October last year also, Tesla had cut slashed prices of Model 3 and Model Y by around 9.4% in the country.

CNN quoted Grace Tao, Tesla’s vice president for external relations in China, as saying, “Tesla’s price cuts are backed by innumerable engineering innovations. We are responding to the country’s call with practical actions to promote economic development and release the potential of domestic demand.”

According to the China Passenger Car Association, Tesla’s Shanghai factory delivered around 56,000 vehicles in December, down 21 percent from last year, and down 44 percent from the preceding month of November.

The Chinese Government on December 31 had ended years long subsidy for electric vehicle purchases in the country.

Worldwide, Tesla delivered 405,278 vehicles in the fourth quarter, compared to 343,000 vehicles in the third quarter, despite concerns regarding slowing demand for electric vehicles amid recession fears.

The automaker produced 439,701 cars in the quarter, compared with 365,000 vehicles in the preceding third quarter.

In 2022, vehicle deliveries grew 40 percent year-over-year to 1.31 million, while production grew 47 percent from a year ago to 1.37 million, despite significant COVID and supply chain-related challenges throughout the year.

The latest developments come as Tesla is seeing sharp drop in its stock value after its founder and Chief Executive Officer Elon Musk agreed to a $44 billion takeover of Twitter as well as due to concerns about deliveries as China’s struggle to contain COVID-19 cases led to a slump in production.

In early January, Tesla reportedly made China Head Tom Zhu as the highest-profile executive after Musk, with direct oversight for deliveries in all of its major markets and operations of its key production hubs.

Zhu, while retaining responsibilities in China and rest of Asia, was promoted to lead U.S. assembly plants as well as sales operations in North America and Europe.

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