In China, Tesla could win electric vehicle price battle – but lose the war Semrushtools

Slashed prices have given Tesla’s China sales a pop, but analysts – and even fans – warn the U.S. automaker needs to up its long-term game to avoid choking on the dust of fast-moving rivals in the world’s biggest electric vehicle market.

Most immediately, Tesla’s January price cuts drove deliveries of its China-made vehicles up 18% from December. Tesla’s thick profit margins have put it in a position to take a price war to competitors in China and beyond, analysts say.

But they say Tesla has lagged competitors in China in introducing new models, improving navigation systems and adding luxe interior touches or white-glove customer service to serve the developing range of consumer preferences for EVs.

“Tesla’s facing a serious problem of a very limited product mix,” said Cui Dongshu, secretary general of China Passenger Car Association (CPCA). “Its slowness to respond to Chinese consumers’ preferences has led to a very passive positioning for Tesla to rely on few means such as price cuts to stay competitive.”

Even Tesla Chief Executive Elon Musk himself has conceded that China is where his firm could face its toughest competition.

Tesla did not respond to Reuters’ request for comment on its China business. Grace Tao, Tesla’s vice president in charge of external communications in China, said previously the price cuts in China reflected engineering innovation and answered Beijing’s call to encourage economic development and ..

China’s Association of Automobile Manufacturers expects sales of EVs and plug-in hybrids to surge by 35% in 2023 to 9 million vehicles – nearly a third of China’s total new vehicle sales.

Chang Yan, a 34-year-old Chinese auto blogger, who was among Model 3 buyers in China in 2018, said his car still asks him to make U-turns on strictly guarded Chang’an Avenue near Tiananmen Square, where such moves are banned.

“This is a sharp contrast with Nio, (EV brands) Xpeng and Li Auto, whose navigation aids have been working almost perfectly,” said Chang, who also drives a Nio sedan.

Tesla has been considering a shift in its marketing in China, focusing more on energy  ..

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