Tesla Shares fell 3% in premarket trading on Monday, while Chinese stocks fell 3% Li automobile plunged to an 11-month low after each firms cut prices for his or her electric vehicles in various markets amid intense competition.
US electric vehicle giant Tesla has reduced the starting price of its electric vehicle Model 3 in China on Sunday to 231,900 yuan (US$32,000), a discount of 14,000 yuan, as reported by Reuters. The report also said that the corporate has reduced prices in other key markets resembling Germany.
Meanwhile, Li Auto cut prices for its models, including the L7, L8, L9 and the newly launched mega SUV, it said on its website on Monday Weibo account. Discounts on the models were reportedly as high as 30,000 yuan.
Checks by CNBC on Tesla and Li Auto's web sites on Monday showed their vehicles were listed on the updated prices.
Hong Kong-listed shares of Li Auto fell 8.3% during Monday's session to their lowest level in 11 months, while shares of other Chinese electric vehicle makers also fell – Nio fell by 1.7%, Xpeng Discount 1.9% and BYD Lost 0.2%.
These price cuts come at a time when competition in China's electric vehicle space has intensified and native automakers are pushing to outdo U.S. rival Tesla with high-quality technology and competitive pricing.
Eugene Hsiao, head of China equity strategy at Macquarie Group, said in a research note over the weekend that every one of China's largest electric vehicle makers had one goal in mind: “to take the crown from Tesla,” noting that it’s probably the most competitive domestic firms trade automobile market in recent history.
Hsiao said the discounts are only one aspect of a wide range of strategies major EV firms in China are using to weather “the coming wave of industry consolidation.”
Chinese smartphone maker Xiaomi launched its SU7 electric automobile earlier this month, costing it around $4,000 lower than Tesla's Model 3. The company also claimed the brand new automobile would have an extended range.
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