Tesla reduces car prices in China to absorb the impact of trade warfare tariffs

BEIJING / SHANGHAI (Reuters) – Tesla Inc (TSLA.OThe US group announced Thursday that the price of its model X and S cars was reduced in China, announced Thursday the American company under a change of strategy to further reduce the costs related to customs duties related to an intense trade war between China and the United States.

The electric car maker, led by billionaire CEO Elon Musk, has announced that it will cut the prices of both models by 12 to 26 percent, in order to make cars more "affordable" on the world's largest market. Automobile, where so-called "new energy" vehicle sales are rising fast.

This decision came as trade relations between China and the United States were very tense and additional tariffs were applied on US imports into the country, including automobiles, which hurt Tesla, which imports all cars currently sold on the market.

"We are absorbing a significant portion of the tariff to make our cars more affordable for customers in China," Tesla said in a statement sent to Reuters.

This decision marks a change from July, when Tesla was one of the first American manufacturers to raise prices in the market in response to tariffs. The firm then increased the prices of its model cars X and S by about 20%.

Tesla warned last month that he was facing big problems selling cars in China due to new tariffs that would require him to speed up investments in his first Gigafactory in Shanghai, at the same time. foreign.

The automaker has secured the site last month for installation, which will help to avoid high import tariffs.

The company, which recently launched pre-sales of its new model 3 car in China, said in a statement that the price of the car would start at 540,000 yuan ($ 77,928.83) for a two-wheel all-wheel drive version. and 595,000 yuan for a performance. version.

Before price rises in July, Tesla had lowered prices for its models in China in May, after Beijing announced that it would lower import tariffs for all auto imports.

($ 1 = 6.9294 Chinese yuan)