Tesla Inc. triggered a price war in China that’s poised to reshape the world’s biggest car market, with hefty discounts threatening to drive some automakers out of business.
In October, the U.S. electric-vehicle maker — a major player in hyper-competitive China — cut prices on models produced at an enormous factory on the outskirts of Shanghai. The cuts escalated in January, with another discount that left Tesla’s locally-made vehicles up to 14 percent cheaper than last year, and in some cases almost 50 percent less expensive than in the U.S. and Europe.
The moves left rivals with little option but to follow suit. Among them were local EV upstarts such as Xpeng Inc. and Nio Inc. as well as leading international brands like Volkswagen Group and Mercedes-Benz Group, which offered discounts of up to 70,000 yuan ($10,000). Ford Motor Co.’s Mach-E electric crossover is down to a starting price of 209,900 yuan, about a third cheaper than in the U.S.
“Tesla created havoc for rest of the market,” said Jochen Siebert, managing director of JSC Automotive, a consultancy with offices in Shanghai and Stuttgart.
At least 30 more carmakers have cut prices, according to calculations by Bloomberg News and local media.