Date
16 December 2018
Tesla says it is absorbing 'a significant part' of new tariffs in a bid to make its cars more affordable for Chinese customers. Photo: Reuters
Tesla says it is absorbing 'a significant part' of new tariffs in a bid to make its cars more affordable for Chinese customers. Photo: Reuters

Tesla cuts China car prices to absorb hit from trade war tariffs

Tesla is cutting the price of its Model X and Model S cars in China, a move that will see the American electric carmaker take more of a hit from tariffs linked to the Sino-US trade war.

The company said on Thursday that it will slash prices of the two models by 12-26 percent to make the cars more “affordable” for Chinese consumers, Reuters reports.

“We are absorbing a significant part of the tariff to help make our cars more affordable for customers in China,” the US firm was quoted as saying in a statement.

Tesla, which recently launched pre-sales of its new Model 3 car in China, added in its statement sent to Reuters that the car’s pricetag would start from 540,000 yuan (US$77,930) for a dual motor all-wheel drive version, and 595,000 yuan for a performance version.

The automaker’s price cut Model X and Model S comes amid escalating trade tensions between Beijing and Washington, which has seen extra tariffs slapped on US imports into China, which has hurt sales.

Tesla currently imports all the cars it sells in the China market.

In July, Tesla had raised prices in China in response to tariffs, hiking prices on its Model X and S cars by about 20 percent.

But now it appears to have changed its strategy, opting to shoulder more of the new tariff burden.

Tesla warned last month it was facing major problems with selling cars in China due to new tariffs that would force it to accelerate investment in its first overseas Gigafactory in Shanghai.

The carmaker last month secured the site for the facility, which will help it avoid steep import tariffs, the report noted.

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RC

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