Tesla, which took the lead in opening the "price war" in the domestic car market, announced its latest "results".

On April 4, Beijing time, the latest data released by Tesla showed that in the first quarter of this year, Tesla produced about 3,44 electric vehicles worldwide, a year-on-year increase of 08.44%; Cumulative delivery of about 3,42 new vehicles, a year-on-year increase of 29%, breaking Tesla's quarterly delivery record.

In the eyes of the outside world, Tesla's sharp increase in deliveries in the first quarter of this year is mainly due to its price cuts at the beginning of the year. Tesla global vice president Zhu Xiaotong said frankly at the Tesla Investor Day held on March 3 that at the beginning of this year, Tesla's sales in the Chinese market have been greatly increased due to price cuts, and even there is a situation of short supply.

Tesla's sharp price reduction is also considered to be the fuse of the "price war" in the domestic car market. However, Li Bin, founder, chairman and CEO of NIO, said in an interview with reporters at the 2023 China Electric Vehicle <> Forum that Tesla's price reduction in the Chinese market is a method it takes in the face of fierce competition. With the rise of "Chinese counterparts" such as BYD, Tesla's "price war" is also a last resort, which proves that Chinese brands are doing well.

The Chinese market may contribute more than 50% of deliveries

At the beginning of this year, Tesla's "price reduction frenzy" swept the world, respectively in China, Japan, South Korea, the United States, Europe and other countries and regions significantly reduced the original price, involving Model 3 and Model Y and other best-selling models in the market, once triggered consumer car buying fever. "As long as the price of the vehicle can be made favorable enough to make it more affordable, then there is nothing else to worry about." Zhu Xiaotong said.

On January 1, Tesla announced a significant price reduction for the domestic Model 6 and Model Y. Among them, the starting price of the domestically produced Model 3 dropped to 3,22 yuan, and the starting price of the Model Y dropped to 99,25 yuan, a decrease of 99,2 to 4,8 yuan, and the price of many models set a record low. "Tesla has performed well in 2022, and the market size has increased significantly, so the cost has decreased, and it is natural that the price should be reduced." Cui Dongshu, secretary-general of the National Passenger Vehicle Market Information Association, said.

Thanks to this, Tesla's deliveries in the domestic auto market in the first two months of this year have been greatly improved. According to data from the Passenger Association of China, in January ~ February this year, Tesla China delivered more than 2,1 new vehicles and 2,6 new vehicles respectively, with a cumulative delivery of more than 6,7 units.

On April 4, the reporter learned from people familiar with the matter that Tesla's new car deliveries in China in March are expected to be the same as in February. This also means that Tesla China will contribute more than 3% of deliveries to its global market in the first quarter of this year.

It is reported that since the launch of the Model 3, Tesla has greatly reduced its production costs by 30% through product improvements and other means. Tesla's goal is to reduce the cost of vehicle production by 50%, so that more people can use Tesla's electric vehicles. It can also be seen that Tesla's future price is expected to further decline.

Industry appeal: "price war" is not desirable

As of mid-to-late March, more than 3 car companies have joined the current round of "price war" in the auto market. "The recent price cut has made everyone uncomfortable. NIO's gross profit is low and it cannot participate in the 'price war'. Li Bin said frankly.

In Cui Dongshu's view, this round of "price war" has brought more negative effects to the domestic car market, not only interfering with consumers' car purchase choices, but also destroying the pricing logic of the car market. "This 'stampede' price war should end early, so that the car market can return to a normal state of development." Cui Dongshu told reporters.

To this end, the China Association of Automobile Manufacturers and the China Automobile Dealers Association have also spoken out on the "price war" in the auto market. The China Association of Automobile Manufacturers called for rational treatment of this round of automobile promotion, and the market should return to normal order as soon as possible. The China Automobile Dealers Association also said that if only local car brands are subsidized, this will inevitably cause the segmentation of the automobile market and the chaos of the market order.

Although the "price war" in the current wheel vehicle market will bring more negative effects, it will not have a substantial impact on the trend of the domestic new energy vehicle market. Cui Dongshu predicts that in 2023, there will be 850.30 million domestic new energy passenger vehicles, or an increase of about 4000%. In the future, China's automobile production and sales are expected to exceed <> million units. According to the Daily Economic News