China's EV price war forces global manufacturers to follow suit
Tesla cuts prices by over 10%, with Hyundai, Ford, GM, and Nissan following suit to counter the influx of Chinese cars flooding the market.
Nikkei Asia reports that the “electric vehicle price war” is expanding from China to the global market, forcing manufacturers like Tesla and Nissan to slash prices to retain their customer base.
On Tuesday (October 7), Tesla unveiled a new version of its flagship vehicle in the US, priced around 10% lower than the previous entry-level model.
The new Model Y SUV starts at US$39,990 (THB1.3 million), a reduction of US$5,000 (THB160,000) from the lowest-priced current model, with reduced range and some interior options cut.
This price cut comes after the Trump administration’s cancellation of the US$7,500 tax rebate for electric vehicles under President Joe Biden, leading to an approximately 20% price increase for the Model Y and other popular models. As a result, Tesla had to launch more affordable models to keep its customer base intact.
Tesla's stock dropped 4% on Tuesday, and its market share of electric vehicles in the US has now fallen below 50%, down from over 80% five years ago. Many investors believe the price reduction will not be enough to help the company recover effectively.
Meanwhile, American automakers such as General Motors and Ford Motor have also started cutting electric vehicle prices, with plans to release models priced under U$30,000.
In addition, Hyundai Motor has reduced the prices of its new electric vehicles in the US by up to 20% compared to the previous lineup. CEO Jose Munoz stated that the company plans to introduce affordable and competitive electric vehicles in Europe, India, and China.
Nissan has also announced that the suggested retail price of its new standard Leaf model is approximately ¥5.19 million (US$33,984), ¥60,000 lower than the previous model.
This trend of price reductions is driven by pressure from BYD and other Chinese automakers, who are using a “low-price” strategy to penetrate the Japanese market as sales in China slow. Recently, BYD temporarily reduced the prices of its popular models in Japan by as much as ¥1.17 million.
Goldman Sachs predicts that while electric vehicles currently account for just 15% of global vehicle sales, their growth will accelerate around 2030, reaching 52% by 2040 in Europe.
“In the long term, the price of electric vehicles will drop globally,” said Sanshiro Fukao, a senior researcher at Itochu Research Institute. “We are entering a transition from a market driven by early adopters to one where affordable electric vehicles will become mainstream.”
